Requirement 1: Prepare a flexible budget based on the actual number of recliners
ID: 2544661 • Letter: R
Question
Requirement 1: Prepare a flexible budget based on the actual number of recliners sold. (round budget amounts per unit to the nearest cent.)
Data Table Static Budget (1,000 recliners) Actual Results (980 recliners) Sales (1,000 recliners x $ 515 each) S 515,000 (980 recliners x S 495 each) 485,100 Variable Manufacturing Costs Direct Materials (6,000 yds. @ S 8.60 /yd.) (6,143 yds. @ S 8.40 /yd.) (10,000 DLHr a S 9.10 DLHir) (9,600 DLHr @ S 9.20 DLHr) (6,000 yds. S 5.00 /yd.) (6,143 yds. @ S 6.40 /yd.) 51,600 51,601 Direct Labor 91,000 88,320 Variable Overhead 30,000 39,315 Fixed Manufacturing Costs Fixed Overhead Total Cost of Goods Sold Gross Profit 60,000 232,600 282,400 S 62,000 241,236 243,864Explanation / Answer
Requirement 1 Flexible Budget based on number of Recliners Sold Budget Amount Per unit Actual Units (Recliners) 980 Sales 515 504700 Variable Manufacturing costs Direct Materials 8.6 50568 Direct Labor 9.1 89180 Variable overhead 5 29400 Fixed Manufacturing Costs Fixed manufacturing overhead 60000 Total cost of goods sold 229148 Gross profit 275552 Requirement 2 Direct Materials cost Variance =(AC-SC)*AQ =(8.4-8.6)*6143 1228.6 Favourable Direct labor cost variance =(AC-SC)*AQ =(9.2-9.1)*9600 960 Unfavourable Direct Materials efficiency Variance =(AQ-SQ)*SC =(6143-6000)*8.6 1229.8 Unfavourable Direct labor efficiency variance =(AQ-SQ)*SC =(9600-10000)*9.1 3640 Favourable VOH Cost Variance =(AC-SC)*AQ =(6.4-5)*6143 8600.2 Unfavourable VOH Efficiency Variance =(AQ-SQ)*SC =(6143-6000)*5 715 Unfavourable FOH Cost variance =Actual FOH-Budgeted FOH =62000-60000 2000 Unfavourable FOH volume variance =Budgeted FOH-Allocated FOH =60000-(60000/1000*980) 1200 Unfavourable Excuse me for not answering Requirment 3 & 4 as it is hidden & not visible properly
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