Acme Company’s production budget for August is 18,600 units and includes the fol
ID: 2446351 • Letter: A
Question
Acme Company’s production budget for August is 18,600 units and includes the following component unit costs: direct materials, $8.00; direct labor, $11.50; variable overhead, $5.00. Budgeted fixed overhead is $43,000. Actual production in August was 19,998 units, actual unit component costs incurred during August include direct materials, $10.00; direct labor, $10.50; variable overhead, $6.00. Actual fixed overhead was $45,600.
Prepare a performance report, including each cost component. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.)
Acme Company’s production budget for August is 18,600 units and includes the following component unit costs: direct materials, $8.00; direct labor, $11.50; variable overhead, $5.00. Budgeted fixed overhead is $43,000. Actual production in August was 19,998 units, actual unit component costs incurred during August include direct materials, $10.00; direct labor, $10.50; variable overhead, $6.00. Actual fixed overhead was $45,600.
Explanation / Answer
Statement showing performance Particulars Budget Budgeted Costas per Actual Actual Variance = Budgetd - Actual Fav or UnFavourable No of units 18,600.00 19,998.00 19,998.00 Direct Materials@8 and 10 148,800.00 159,984.00 199,980.00 (39,996.00) Unfavourable Direct Labor @11.50and 10.5 213,900.00 229,977.00 209,979.00 19,998.00 Favourable Variable O/H @5 and 6 93,000.00 99,990.00 119,988.00 (19,998.00) Unfavourable Budgeted Fixed Overhead 43,000.00 43,000.00 45,600.00 (2,600.00) Unfavourable Total Overhead 498,700.00 532,951.00 575,547.00 (42,596.00)
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