B&L; Landscapes, Inc. Mini Practice Part 5 Bill Graham and Larry Miller incorpor
ID: 2438558 • Letter: B
Question
B&L; Landscapes, Inc. Mini Practice Part 5 Bill Graham and Larry Miller incorporated B&L; Landscapes, Inc. on July 1, 2016. The business consists of lawn care and sprinkler system installations. In addition, they also sell two types of fertilizer. During 2017, B&L; Landscapes, Inc. acquired a 30% interest in Crestine Pipe. The president of Crestline wants to develop a management report to evaluate Manufacturing Overhead costs. Bill and Larry want to help and have volunteered your services to provide some managerial reporting for Crestline. Crestline Pipe distributes high-quality PVC pipe and has the following information tor the month of March, 2018 Crestline Pipe Manufacturing Overhead Budget (Static) For the Month of March, 2018 Budgeted production in LF 117.500 Budgeted costs Indrect materials ($0.30/DLH) 7,050 Indirect labor ($0.50/DLH)11,750 10,575 Maintenance ($0.25/DLH) 5,875 42,000 16,800 2,500 1,200 ?300 $22.029 Utilities ($0.45/DLH) Salaries Depreciation Property taxes Insurance Janitorial Total budgeted costsExplanation / Answer
1.
2.
The costs for which there is a significant favorable or unfavorable variance and which are controllable should be investigated further such as the utilities cost.
3.
The controllable manufacturing overhead costs are those costs which can be controlled or influenced by the manufacturing manager. The responsibility report shows how well the manufacturing manager has been able to control these costs which are within his sphere of influence. From the responsibility report for the month of March it is seen that there is a favorable variance of $25 which means that the actual costs have been lesser than the budgeted costs and the manager has been able to control the costs which is a positive indicator of his/her performance.
B&L LANDSCAPES, INC. Manufacturing Overhead Flexible Budget For the Month of March, 2018 Production in LF 115500 116500 117500 118500 119500 Variable costs Indirect materials 6930 6990 7050 7110 7170 Indirect labor 11550 11650 11750 11850 11950 Utilities 10395 10485 10575 10665 10755 Maintenance 5775 5825 5875 5925 5975 Total variable costs 34650 34950 35250 35550 35850 Fixed costs Salaries 42000 42000 42000 42000 42000 Depreciation 16800 16800 16800 16800 16800 Property taxes 2500 2500 2500 2500 2500 Insurance 1200 1200 1200 1200 1200 Janitorial 1300 1300 1300 1300 1300 Total fixed costs 63800 63800 63800 63800 63800 Total budgeted costs 98450 98750 99050 99350 99650Related Questions
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