E10-4 (a,b) Raney Company uses a flexible budget for manufacturing overhead base
ID: 2384883 • Letter: E
Question
E10-4 (a,b)Raney Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows.
Indirect labor $1.00
Indirect materials 0.50
Utilities 0.40
Fixed overhead costs per month are: Supervision $4,000, Depreciation $1,500, and Property Taxes $800. Assume that in July 2008, Raney Company incurs the following manufacturing overhead costs.
Variable Costs
Fixed Costs
Indirect labor $8,700 Supervision $4,000
Indirect materials 4,300 Depreciation 1,500
Utilities 3,200 Property taxes 800
Prepare a flexible budget performance report, assuming that the company worked 9,000 direct labor hours during the month. (If answer is zero, please enter 0. Do not leave any fields blank.)
RANEY COMPANY
Manufacturing Overhead Flexible Budget Report
For the Month Ended July 31, 2008
Difference
Budget Actual Costs Favorable F
Direct labor hours
9,000 DLH
9,000 DLH
Unfavorable U
Variable costs
Indirect labor $ $ $
Indirect materials
Utilities
Total variable costs
Fixed costs
Supervision
Depreciation
Property taxes
Total fixed costs
Total costs
$
$
$
Prepare a flexible budget performance report, assuming that the company worked 8,500 direct labor hours during the month.
RANEY COMPANY
Manufacturing Overhead Flexible Budget Report
For the Month Ended July 31, 2008
Difference
Budget Actual Costs Favorable F
Direct labor hours
8,500 DLH
8,500 DLH
Unfavorable U
Variable costs
Indirect labor $ $ $
Indirect materials
Utilities
Total variable costs
Fixed costs
Supervision
Depreciation
Property taxes
Total fixed costs
Total costs
$
$
$
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Explanation / Answer
Actual Cost Actual Cost Standard Cost Standard Cost Variable Costs: For 9000 Units Per Unit For 9000 Units Per Unit Difference Rating Indirect Labor 8700 0.97 9000 1 300 Favorable Indirect Materials 4300 0.48 4500 0.5 200 Favorable Utilities 3200 0.35 3600 0.4 400 Favorable Total Variable Cost: - (A) 16200 1.8 17100 1.9 900 Favorable Fixed overhead supervision 4000 4000 0 Depreciation 1500 1500 0 Property tax 800 800 0 Total Fixed Cost - (B) 6300 6300 0 Total Cost - (A + B) 22500 23400 900 Favorable Actual Cost Actual Cost Standard Cost Standard Cost Variable Costs: For 8500 Units Per Unit For 8500 Units Per Unit Difference Rating Indirect Labor 8245 0.97 8500 1 255 Favorable Indirect Materials 4080 0.48 4250 0.5 170 Favorable Utilities 2975 0.35 3400 0.4 425 Favorable Total Variable Cost: - (A) 15300 1.8 16150 1.9 850 Favorable Fixed overhead supervision 4000 4000 0 Depreciation 1500 1500 0 Property tax 800 800 0 Total Fixed Cost - (B) 6300 6300 0 Total Cost - (A + B) 21600 22450 850 Favorable Actual Cost Actual Cost Standard Cost Standard Cost Variable Costs: For 9000 Units Per Unit For 9000 Units Per Unit Difference Rating Indirect Labor 8700 0.97 9000 1 300 Favorable Indirect Materials 4300 0.48 4500 0.5 200 Favorable Utilities 3200 0.35 3600 0.4 400 Favorable Total Variable Cost: - (A) 16200 1.8 17100 1.9 900 Favorable Fixed overhead supervision 4000 4000 0 Depreciation 1500 1500 0 Property tax 800 800 0 Total Fixed Cost - (B) 6300 6300 0 Total Cost - (A + B) 22500 23400 900 Favorable Actual Cost Actual Cost Standard Cost Standard Cost Variable Costs: For 8500 Units Per Unit For 8500 Units Per Unit Difference Rating Indirect Labor 8245 0.97 8500 1 255 Favorable Indirect Materials 4080 0.48 4250 0.5 170 Favorable Utilities 2975 0.35 3400 0.4 425 Favorable Total Variable Cost: - (A) 15300 1.8 16150 1.9 850 Favorable Fixed overhead supervision 4000 4000 0 Depreciation 1500 1500 0 Property tax 800 800 0 Total Fixed Cost - (B) 6300 6300 0 Total Cost - (A + B) 21600 22450 850 FavorableNote: First given data considered as Standards and second given data as actual costs for 9000 units in july. Thank you.... Actual Cost Actual Cost Standard Cost Standard Cost Variable Costs: For 9000 Units Per Unit For 9000 Units Per Unit Difference Rating Indirect Labor 8700 0.97 9000 1 300 Favorable Indirect Materials 4300 0.48 4500 0.5 200 Favorable Utilities 3200 0.35 3600 0.4 400 Favorable Total Variable Cost: - (A) 16200 1.8 17100 1.9 900 Favorable Fixed overhead supervision 4000 4000 0 Depreciation 1500 1500 0 Property tax 800 800 0 Total Fixed Cost - (B) 6300 6300 0 Total Cost - (A + B) 22500 23400 900 Favorable Actual Cost Actual Cost Standard Cost Standard Cost Variable Costs: For 8500 Units Per Unit For 8500 Units Per Unit Difference Rating Indirect Labor 8245 0.97 8500 1 255 Favorable Indirect Materials 4080 0.48 4250 0.5 170 Favorable Utilities 2975 0.35 3400 0.4 425 Favorable Total Variable Cost: - (A) 15300 1.8 16150 1.9 850 Favorable Fixed overhead supervision 4000 4000 0 Depreciation 1500 1500 0 Property tax 800 800 0 Total Fixed Cost - (B) 6300 6300 0 Total Cost - (A + B) 21600 22450 850 Favorable
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