Gundy Company expects to produce 1,278,720 units of Product XX in 2014. Monthly
ID: 2490673 • Letter: G
Question
Gundy Company expects to produce 1,278,720 units of Product XX in 2014. Monthly production is expected to range from 85,670 to 123,730 units. Budgeted variable manufacturing costs per unit are direct materials $3, direct labor $8, and overhead $9. Budgeted fixed manufacturing costs per unit for depreciation are $4 and for supervision are $2. In March 2014, the company incurs the following costs in producing 104,700 units: direct materials $336,512, direct labor $832,049, and variable overhead $944,497. Actual fixed costs were equal to budgeted fixed costs. Prepare a flexible budget report for March.
Explanation / Answer
Working Notes
Gundy Compny Flexible Budget Report Foe the month ended March 31,2014 Budget Actual Diffrance Units producted 104700 104700 Favorable F/Unfavorable U Variable costs Direct materials 314100 336512 -22412 Direct lavor 837600 832049 5551 Overhead 942300 944497 -2197 Total variable cost 2094000 2113058 -19058 Fixed costs Depreciation 426240 426240 Supervision 213120 213120 Total fixed costs 639360 639360 Total costs 2733360 2752418 -19058
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