Rammazzotti, Inc., is looking for feedback on company performance. The company c

Question

Rammazzotti, Inc., is looking for feedback on company performance. The company compares the budget for the year with the actual costs. Data have been collected below:

Rammazzotti Inc., had the following budgeted data:

The following actually occurred:

The flexible budget for direct materials cost in 2018 is

Unit sales for 2018 26,000 Unit production for 2018 26,000 Budgeted fixed overhead for 2018: Supervision $   800 Depreciation 2,000 Rent 100 Budgeted variable costs per unit: Direct materials $0.15 Direct labor 0.20 Supplies 0.02 Indirect labor 0.05 Power 0.02

Explanation / Answer

Flexible budget for direct material :

Direct material Actual unit sold 24000 Budget cost of material per unit 0.15 Flexible budget cost for direct material 3600

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