Hello, I need help with my ACC-202 course, regarding the final project, a compan
ID: 2742444 • Letter: H
Question
Hello,
I need help with my ACC-202 course, regarding the final project, a company named Peyton Approved. I need to create a budget variance report and labor and materials variance.I am completely lost on where to get the numbers from, and how to calculate everything. Please advise with as much direction as possible, as I would like the correct answers, but also to fully understand how they were concluded! Below is part I of the project which I got 100% correct. I believe all of the information comes from that. I will also provide what the template for the variance reports looks like as well. Any help is greatly appreciated! Thank you very much! I can also email the templates if that is easier...
Next Month's
Budgted Sales
Percentage of Inventory
to Future Sales
Budgeted Ending
Inventory
Required Units to be
Produced
Deduct Beginning Inventory
(Previous Month Ending
Inventory)
Raw Materials Budget
Production Budget
(Units)
Materials Requirement
Per Unit
Materials Needed for
Production
Add Budgeted Ending
Inventory
Total Materials Requirments
(Units)
Deduct Beginning Inventory
(Previous Month Ending Inv.)
Total Cost of Direct Materials
Purchases
Direct Labor Budget
Budgeted Production
(Units)
Labor Requirements Per
Unit (Hours)
Budget Production
(Units)
Sales Commision
Percent
Sales Commissions
Expense
Interest on Long-Term
Notes Payable
($300,000x0.9%)
THE FOLLOWING IS WHAT I NEED HELP WITH....
Budget Variance Analysis:
The actual quantity of material used was 31,000 with an actual cost of $7.75 per unit. The actual labor hours were 33,000 with an actual rate per hour of $15.
a.) Develop a variance analysis including a budget variance performance report and appropriate variances for materials and labor. Use the budget variance student worksheet provided below.
b.) In your budget variance report, discuss each variance. What does the variance tell you?
c.) In addition, your budget variance report should cover the following: What needs to be investigated to determine the reason for the variance? Why?
Peyton Approved
Budget Variance Report
Total Direct Materials Variance:
Sales Budgets - July, August, SeptemberExplanation / Answer
I have provided you with all the variance's possible.
Thanks, You may find this useful.
Sales Budgets - July, August, September Budgeted Units Budgeted Unit Price Budgeted Total Dollars 15-Jul 18,000 18 $324,000 15-Aug 22,000 18 $396,000 15-Sep 20,000 18 $360,000 Total for 1st Qtr. 60,000 18 $1,080,000 Production Budget July August September Total Next Month's 22,000 20,000 24,000 66,000 Budgted Sales Percentage of Inventory 70% 70% 70% 70% to Future Sales 42000 Budgeted Ending 15,400 14,000 16,800 46,200 Inventory Add Budgted Sales 18,000 22,000 20,000 60,000 Required Units to be 33,400 36,000 36,800 106,200 Produced Deduct Beginning Inventory -16,800 -15,400 -14,000 -46,200 (Previous Month Ending Inventory) Units to be Produced 16,600 20,600 22,800 60,000 Raw Materials Budget July August September Total Production Budget 16,600 20,600 22,800 60,000 Materials Requirement 0.5 0.5 0.5 0.5 Materials Needed for 8,300 10,300 11,400 30,000 Production Add Budgeted Ending 2,060 2,280 1,980 6,320 Inventory Total Materials Requirments 10,360 12,580 13,380 36,320 (Units) Deduct Beginning Inventory -4600 -2060 -2280 -8940 (Previous Month Ending Inv.) Materials to be Purchased 5,760 10,520 11,100 27,380 Material Price Per Unit $7.75 $7.75 $7.75 $7.75 Total Cost of Direct Materials $44,640 $81,530 $86,025 $212,195 Purchases Direct Labor Budget July August September Total Budgeted Production 16,600 20,600 22,800 60,000 (Units) Labor Requirements Per 0.5 0.5 0.5 0.5 Unit (Hours) Total Labor Hours Needed 8,300 10,300 11,400 30,000 Labor Rate (Per Hour) $16.00 $16.00 $16.00 $16.00 Labor Dollars $132,800 $164,800 $182,400 $480,000 Factory Overhead Budget July August September Total Budget Production 16.6 20,600 22,800 60,000 (Units) Variable Factory Overhead Rate $1.35 $1.35 $1.35 $1.35 Budgeted Variable Overhead $22,410 $27,810 $30,780 $81,000 Fixed Overhead $20,000 $20,000 $20,000 $60,000 Budgeted Total Overhead $42,410 $47,810 $50,780 $141,000 Selling Expense Budget July August September Total Budgeted Sales $324,000 $396,000 $360,000 1,080,000 Sales Commision x12% x12% x12% x12% Percent Sales Commissions $38,880 $47,520 $43,200 $129,600 Expense Sales Salaries $3,750 $3,750 $3,750 $11,250 Total Selling Expenses $42,630 $51,270 $46,950 $140,850 General and Administrative Expense Budget July August September Total Salaries $12,000 $12,000 $12,000 $36,000 Interest on Long-Term $2,700 $2,700 $2,700 $8,100 Notes Payable ($300,000x0.9%) Total Expenses $14,700 $14,700 $14,700 $44,100 THE FOLLOWING IS WHAT I NEED HELP WITH.... Budget Variance Analysis: The actual quantity of material used was 31,000 with an actual cost of $7.75 per unit. The actual labor hours were 33,000 with an actual rate per hour of $15. Actual Results Static Budget Variance Favorable/Unfavorable Direct Materials Variances 31000 27,380 3,620 Unfavourable Cost/Price Variance 7.75 7.750 0.000 Efficiency Variance 28055 Unfavourable Total Direct Materials Variance: 212195 Direct Labor Variances 33000.00 30,000 -3,000 Unfavourable Cost/Price Variance $ 15.00 16 -1 Favourable Efficiency Variance = actaul labour hrs. * difference between rates -33,000 Unfavourable Total Direct Labor Variance: $495,000.00 480,000 15,000 Unfavourable Labor Variance Actual Cost Actual Quantity Standard Cost Standard Quantity Variance $ 495,000.00 31000 480,000 27,380 15.96774194 17.5310446 1.563302623 Rate variance =(actaul cost/Actaul qty.)-(StandardCost/Std qty) Materials Variance Actual Cost Actual Quantity Standard Cost Standard QuantityRelated Questions
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