s the stafic budget and actual resuits tor Jones Company Sales Units 00.000 01.0

Question

s the stafic budget and actual resuits tor Jones Company Sales Units 00.000 01.000 Direct Direct Labor 3750,000$3.219.375 with a standard price of $4.50 weathshirts use q standard tobric amount of & yards of raw materiol per yard. The company planned to produce 100,000 sweatshirts in The vards of fabric. At the end of 2017, the company reported that they tad used 355.500 yards of fabric for a standlard sweatshirt. At the to make 101,000 sweatshirts. The company produces their sweatshi obor price of $25.00 per hour. The standard amount of labor was 1.5 hour per 6.250 hours to make ond of 2017, the company reported that they had used 12 the 101.000 sweatshirts. repare a fexible budget for Jones Company using the table above. Calculate the variance tor ne Rlexible Budget versus Actual and state whether the variance is tavorable or unfavorable

Explanation / Answer

Jones Company Flexible budget performance report Abstract For the monthof June Static Budget Actual results Flexible Budget Variance Fav/ UnFav Sales Units       100,000        101,000              101,000 Sales revenue    8,000,000     8,282,000          8,080,000     202,000 Fav Direct Materials    2,700,000     2,638,625          2,727,000     (88,375) Fav Direct Labor    3,750,000     3,219,375          3,787,500 (568,125) Fav Flexible budget workings Sales units       101,000 Selling price (=8,000,000/100,000)                  80 Sales Revenue (101,000*80)    8,080,000 Direct Materials Fabric per unit 6 yards Price per yard 4.5 DM per unit (6*4.5) 27 Total Direct materials (101,000*27)    2,727,000 Direct Labor Standard Labor price 25 per hour Number of hrs per unit 1.5 DM per unit (25*1.5) 37.5 Total direct labor (101,000*37.5)    3,787,500

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