Bowling Company budgeted the following amounts: Variable costs of production: FO

Question

Bowling Company budgeted the following amounts:

Variable costs of production:

FOH:

Prepare a flexible budget for 2,200 units, 2,700 units and 3,200 units.

Refer to the list below for the exact wording of a label or an amount description within your budget.

Variable overhead

Prepare a flexible budget for 2,200 units, 2,700 units and 3,200 units. (Note: Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.)

Bowling Company

Flexible Budget

1

2,200 units

2,700 units

3,200 units

2

Variable:

3

4

5

6

Fixed overhead:

7

8

9

Variable costs of production:

Direct materials 4 pounds @ $0.61 per pound Direct labor 0.4 hr @ $16.10 per hour VOH 0.4 hr @ $2.10 per hour

Explanation / Answer

Flexible Budget Variable Cost Per Unit Unit Levels of Activity        2,200.00        2,700.00        3,200.00 Direct Materials(4 pounds @ $0.61 per pound)                    2.44        5,368.00        6,588.00        7,808.00 Direct Labor(0.4 hr @ $16.10 per hour)                    6.44     14,168.00     17,388.00     20,608.00 Prime Cost     19,536.00     23,976.00     28,416.00 Overhead       Variable overhead(0.4 hr @ $2.10 per hour)                    0.84        1,848.00        2,268.00        2,688.00 Fixed Factory Overhead Materials handling        6,200.00        6,200.00        6,200.00 Depreciation        2,600.00        2,600.00        2,600.00 Total Fixed Costs        8,800.00        8,800.00        8,800.00 Total Costs(Prime Cost+VOH+FOH)     30,184.00     35,044.00     39,904.00

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