22-3A (part level submission) HILL COMPANY Budget Report Assembling Department F
ID: 2473200 • Letter: 2
Question
22-3A (part level submission)
HILL COMPANY
Budget Report
Assembling Department
For the Month Ended August 31, 2014
Difference
Manufacturing Costs
Budget
Actual
Favorable (F)
Unfavorable (U)
Neither Favorable
nor Unfavorable (N)
$48,000
$47,000
$1,000
54,000
51,200
2,800
24,000
24,200
200
18,000
17,500
500
15,000
14,900
100
6,000
6,200
200
165,000
161,000
4,000
12,000
12,000
–0–
17,000
17,000
–0–
6,000
6,000
–0–
35,000
35,000
–0–
$200,000
$196,000
$4,000
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22-3A (part level submission)
Hill Company uses budgets in controlling costs. The August 2014 budget report for the company’s Assembling Department is as follows.HILL COMPANY
Budget Report
Assembling Department
For the Month Ended August 31, 2014
Difference
Manufacturing Costs
Budget
Actual
Favorable (F)
Unfavorable (U)
Neither Favorable
nor Unfavorable (N)
$48,000
$47,000
$1,000
F Direct labor54,000
51,200
2,800
F Indirect materials24,000
24,200
200
U Indirect labor18,000
17,500
500
F Utilities15,000
14,900
100
F Maintenance6,000
6,200
200
U Total variable165,000
161,000
4,000
F Fixed costs Rent12,000
12,000
–0–
N Supervision17,000
17,000
–0–
N Depreciation6,000
6,000
–0–
N Total fixed35,000
35,000
–0–
N Total costs$200,000
$196,000
$4,000
FThe monthly budget amounts in the report were based on an expected production of 60,000 units per month or 720,000 units per year. The Assembling Department manager is pleased with the report and expects a raise, or at least praise for a job well done. The company president, however, is unhappy with the results for August because only 58,000 units were produced.
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Explanation / Answer
a. Total monthly budgeted cost formula=$35000 fixed cost+variable cost of $ 2,75 per unit
165000/60000=$2.75 per unit
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