9 You have just been hired by SecuriDoor Corporation, the manufacturer of a revo
ID: 2468575 • Letter: 9
Question
9 You have just been hired by SecuriDoor Corporation, the manufacturer of a revolutionary new garage door opening device. The president has asked that you review the company's costing system and "do what you can to help us get better control of our manufacturing overhead costs. You find that the company has never used a flexible budget, and you suggest that preparing such a budget would b an excellent first step in overhead planning and control Atter much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for April: Actual Cost in April Cost Formula Utilities Maintenance $ 39,000 plus $1.60 per Supplies 60 per machine-hour Indirect labor Depreciation $67,700 16,800 plus $.17 per machine-hour $ 21,320 58,400 $ 9,400 $116,600 69,400 $ 94,900 plus $1.30 per During Apnil, the company worked 14,000 machine-hours and produced 8,000 units. The company had originally planned to work 16,000 machine-hours during April. Required: 1. Prepare a flexible budget for April. (Input all amounts as positive values.) SecuriDoor Corporation Flexible Budget For the Month Ended April 30 Ublities Maintenance Supplies Indirect labor Depreciaion TotalExplanation / Answer
Flexible budget for April
Machine hours
14,000
Utilities
19,180
Maintenance
61,400
Supplies
8,400
Indirect labor
113,100
Depreciation
67,700
total
283,780
2)
Flexible
Actual
Spending variance
Utilities
19,180
21,320
2,140 (U)
Maintenance
61,400
58,400
3,000(F)
Supplies
8,400
9,400
1000(U)
Indirect labor
113,100
116,600
3,500(U)
Depreciation
67,700
69,400
1,700(U0
Total
269,780
275,120
5,340(U)
Machine hours
14,000
Utilities
19,180
Maintenance
61,400
Supplies
8,400
Indirect labor
113,100
Depreciation
67,700
total
283,780
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