Do It! Review 24-1 Wade Company estimates that it will produce 6,400 units of pr

ID: 2433587 • Letter: D

Question

Do It! Review 24-1 Wade Company estimates that it will produce 6,400 units of product IOA during the current month. Budgeted variable manufacturing costs per unit are direct materials $7, direct labor $12, and overhead $19. Monthly budgeted fixed manufacturing overhead costs are $8,100 for depreciation and $4,300 for supervision. In the current month, Wade actually produced 6,900 units and incurred the following costs: direct materials $42,000, direct labor $75,200, variable overhead $129,600, depreciation $8,100, and supervision $4,540. Prepare a static budget report. Hint: The Budget column is based on estimated production while the Actual column is the actual cost incurred during the period. (List variable costs before fixed costs.) Wade Company Static Budget Report Unfavorable Neither Favorable Were costs controlled?

Explanation / Answer

Static Budget

budgeted

actual

difference = budgeted-actual

Units produced

6400

6900

-500

direct material

44800

42000

2800

direct labor

76800

75200

1600

overheads

121600

129600

-8000

fixed manufacturing overhead

depreciation

8100

neither favorable nor unfavorable

supervision

4300

4540

-240

total

262000

266340

-4340

were cost controlled

No cost is not controlled