waterways for Chapter 10 (WCP 10) Fall Semester Waterways Corporation is continu

Question

waterways for Chapter 10 (WCP 10) Fall Semester Waterways Corporation is continuing its budget preparations. Waterways had the following static budget and actual overhead for October. (Refer to Waterways 9 if you are uncertain about variable versus fixed costs.) Waterways Corporation Manufacturing Overhead Budget Static) For the Month of October Waterways Corporation Manufacturing Overhead Costs (Actual) For the Month of October Budgeted Production (Units 117,500Production in units 118,500 Indirect materials Indirect labor Utilities Maintenance Salaries Depreciation Property taxes Insurance Janitorial $587ST 14,100 11,750 8,225 42,000 16,800 3,000 1,200 1,500 5,910 14,195 11,880 8,275 42,000 16,800 3,000 1,200 1,500 $104,760 indirect materials Indirect labor Utilities Maintenance Salaries Depreciation Pro perty taxes Insurance anitorial budgeted costs $104,450 Waterways produced 118,500 units in October rather than the budgeted number of units. Print Layout View Sec 11 Pages: 1011 words: Oef 200 | 150% MacBook Ai

Explanation / Answer

Waterways Corporation Static budget Flexible Budget Production Type of cost 117500 115000 116000 117000 118000 119000 Total Per unit Indirect material Variable 5875 0.05 5750 5800 5850 5900 5950 Indirect labor Variable 14100 0.12 13800 13920 14040 14160 14280 Utilities Variable 11750 0.10 11500 11600 11700 11800 11900 Maintenance Variable 8225 0.07 8050 8120 8190 8260 8330 Salaries Fixed 42000 42000 42000 42000 42000 42000 Depreciation Fixed 16800 16800 16800 16800 16800 16800 Property Tax Fixed 3000 3000 3000 3000 3000 3000 Insurance Fixed 1200 1200 1200 1200 1200 1200 Janitorial Fixed 1500 1500 1500 1500 1500 1500 Total 104450 103600 103940 104280 104620 104960 b. Waterways Corporation Budget Actual Variance Production Type of cost 118500 118500 Indirect material Variable 5925 5910 15 Indirect labor Variable 14220 14195 25 Utilities Variable 11850 11880 -30 Maintenance Variable 8295 8275 20 Salaries Fixed 42000 42000 0 Depreciation Fixed 16800 16800 0 Property Tax Fixed 3000 3000 0 Insurance Fixed 1200 1200 0 Janitorial Fixed 1500 1500 0 Total 104790 104760 30 c. 1.Indirect material and Indirect labor costs have come down by $15 and $25      respectively in comparison to budget. There seems to be better utilisation      of indirect manpower and good control over utilisation of indirect material. 2. The utilities cost has gone up by $30 in comparison to budget,. This indicates that      there is a scope for improvement in utilisation of utilities and the person      concerned shall be instructed to look into the ways for reducing the utilities      costs. 3. Maintenance costs has come down by $20 which shows good upkeep of the equipment.

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