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Chrome File Edit View History Bookmarks People Window Help a 4) 16% D, Thu 3:24 PM Q. E CengageNOWV2 | Online teaching and learning resource from Cengage Learning O v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?inprogress true Chapter 21 Assignment Show Me HowCalculator eBook Static Budget versus Flexible Budget The production supervisor of the Machining Department for Niland Company agreed to the following monthly static budget for the upcoming year: Niland Company Machining Department Monthly Production Budget $635,000 35,000 58,000 $728,000 Wages Utilities Total The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows Amount Spent Units Produced 106,000 97,000 87,000 January February 658,000 March The Machining Department supervisor has been very pleased with this performance because actual expenditures for January-March have been significantly less than the monthly static budget of 728,000. However, the plant manager believes that the budget should not remain fixed for every month but should “flex" or adjust to the volume of work that is produced in the Machining Department. Additional budget information for the Machining Department is as follows Wages per hour Utility cost per direct labor hour $686,000 624,000 $22 $1.2 Check My Work Previous Next

Explanation / Answer

Jan Feb March units of production 106,000 97,000 87,000 Wages 583000 533500 478500 Utilities 31800 29100 26100 Depreciation 58,000 58,000 58,000 total 672800 620600 562600 supporting calculations: units of production 106,000 97,000 87,000 hours per unit 0.25 0.25 0.25 total hours of production 26500 24250 21750 Wages per hour 22 22 22 total wages 583000 533500 478500 total hours of production 26500 24250 21750 utility costs per hour 1.2 1.2 1.2 total utility 31800 29100 26100

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