Wade Company estimates that it will produce 6,800 units of product IOA during th

Question

Wade Company estimates that it will produce 6,800 units of product IOA during the current month. Budgeted variable manufacturing costs per unit are direct materials $6, direct labor $13, and overhead $19. Monthly budgeted fixed manufacturing overhead costs are $8,500 for depreciation and $3,700 for supervision.

In the current month, Wade actually produced 7,300 units and incurred the following costs: direct materials $38,000, direct labor $87,100, variable overhead $137,200, depreciation $8,500, and supervision $3,990.

Prepare a static budget report. Hint: The Budget column is based on estimated production while the Actual column is the actual cost incurred during the period. (List variable costs before fixed costs.)

Wade Company
Static Budget Report

Difference

Budget

Actual

Favorable
Unfavorable
Neither Favorable
nor Unfavorable

Were costs controlled?

Wade Company
Static Budget Report

Difference

Budget

Actual

Favorable
Unfavorable
Neither Favorable
nor Unfavorable

DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnits ProducedVariable Costs

DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnits ProducedVariable Costs

DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnits ProducedVariable Costs

$

$

$

FavorableUnfavorableNeither Favorable nor Unfavorable

DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnits ProducedVariable Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnits ProducedVariable Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnits ProducedVariable Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnits ProducedVariable Costs

DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnits ProducedVariable Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnits ProducedVariable Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnits ProducedVariable Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsUnits ProducedVariable Costs

$

$

$

FavorableUnfavorableNeither Favorable nor Unfavorable

Explanation / Answer

Given is the details for budgeted 6800 units , based on this details estimates for 7300 units has been made to be compared with actuals for 7300 units .

STATIC BUDGET FOR 7300 UNITS :

As per budget ,cost is controlled for all except supervision cost but over all cost is controlled .

PARTICULARS BUDGET (7300 units)$ ACTUAL(7300 units)$ DIFFERENCE REMARKS Variable cost Direct material(7300*$6) 43800 38000 5800 Favourable Direct labour(7300*$13) 94900 87100 7800 Favourable Variable overhead(7300*$19) 138700 137200 1500 Favourable Total variable cost 277400 262300 15100 Favourable Fixed cost Depreciation 8500 8500 ---- Neither fav Nor unfav Supervision 3700 3990 290 Unfavourable Total fixed cost 12200 12490   290 Unfavourable Total cost 289600 274790 14810 Favourable

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