Rocky Mountain Manufacturing produces a single product. The original budget for

Question

Rocky Mountain Manufacturing produces a single product. The original budget for November was based on expected production of 35,000 units; actual production for November was 33,250 units. The original budget and actual costs incurred for the manufacturing department follow:

Prepare an appropriate performance report for the manufacturing department. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations and round final answers to nearest whole dollar amount. Omit the "$" sign in your response.)

Original Budget Actual Costs Direct materials $ 551,250 $ 541,500 Direct labor 427,000 413,500 Variable overhead 217,000 195,250 Fixed overhead 170,000 172,500 Total $ 1,365,250 $ 1,322,750

Explanation / Answer

Flexed budget for direct material cost = 551250 x 33250/35000 = $523688
Flexed budget for direct labour cost = 427000 x 33250/35000 = $405650
Flexed budget for variable overhead cost = 217000 x 33250/35000 = $206150
Flexed budget for fixed overhead cost = unchanged = $170000

Original

Flexed

Actual

Variance

Direct material

551250

523688

541500

17812 U

Direct labour

427000

405650

413500

7850 U

Variable OH

217000

206150

195250

10900 F

Fixed OH

170000

170000

172500

2500 U

1365250

1305488

1322750

17262 U

Hope this helps!

Original

Flexed

Actual

Variance

Direct material

551250

523688

541500

17812 U

Direct labour

427000

405650

413500

7850 U

Variable OH

217000

206150

195250

10900 F

Fixed OH

170000

170000

172500

2500 U

1365250

1305488

1322750

17262 U

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