Q 24.25: During the second quarter, Wilson Woolen Mills changes the budget amoun

Question

Q 24.25: During the second quarter, Wilson Woolen Mills changes the budget amount for direct materials to $109,000 and the budget amount for supervision to $6,500. It leaves all other budgets the same as in the first quarter, which is shown onscreen. If Wilson's actual second quarter costs are identical to the first quarter costs, are Wilson's total year-to-date actual costs over or under budget, and by how much? Budget Actual Variable costs Direct materials ($9) Direct labor ($23) Overhead ($31) Total variable costs 110,000$109,250 $72,400 $118,500 $298,000 $300,150 $70,000 $118,000 Fixed costs Depreciation Supervision Total fixed costs $9,000 $6,500 $15,500 $313,000 $315,650 $9,000 $6,000 $15,000 Total costs A Actual costs are $4,800 over budget B Actual costs are $5,800 over budget C Actual costs are $500 under budget D Actual costs are $2,150 over budget

Explanation / Answer

Budget Actual Variable cost Direct materials 109,000 109,250 Direct labor 70,000 72,400 overhead 118,000 118,500 total variable costs 297,000 300,150 fixed costs Depreciation 9,000 9,000 supervision 6,500 6,500 total fixed costs 15,500 15,500 total costs 312,500 315,650 Actual budgets is over by (135650-312500)= 3,150 in second quarter Actual budgets is over by (315,650-313,000)= 2,650 in first quarter for year 5,800 Actual costs are over budget by 5,800 answer

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