Acme Company’s production budget for August is 18,600 units and includes the fol

Question

Acme Company’s production budget for August is 18,600 units and includes the following component unit costs: direct materials, $8.00; direct labor, $11.50; variable overhead, $5.00. Budgeted fixed overhead is $43,000. Actual production in August was 19,998 units, actual unit component costs incurred during August include direct materials, $10.00; direct labor, $10.50; variable overhead, $6.00. Actual fixed overhead was $45,600. Required: Prepare a performance report, including each cost component. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.)

  

Original Budget (18600 units)

cost component

Original Budget (18600 units)

Flexed Budget (19998) Actual Cost (19998) Budget variance Direct Materials Direct Labor Variable Overhead Fixed Overhead Total budgeted cost

Explanation / Answer

Cost component Flexible budget Actual cost original budget Budgetd variance

  Direct material 19998 unit*$8 19998*$10 18600*$8

   =$159984 =$199980 =$148800 $51180 U   

   Direct labour 19998 *$11.5 19998*$10.5 18600*$11.5

   =$229977 =$209979 =$213900 $3921 F

Variable overhead 19998* $5 19998 * $6 18600*$5

=$99990 =$119988 =$93000 26988 U

Fixed overhead $43000 $45600 $43000 2600 U

Total budgeted cost 532951 575547 498700 76847 U

Note:-   Flexible budget is for actual units for standard cost

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.