ade Company estimates that it will produce 6,900 units of product IOA during the

Question

ade Company estimates that it will produce 6,900 units of product IOA during the current month. Budgeted variable manufacturing costs per unit are direct materials $8, direct labor $11, and overhead $17. Monthly budgeted fixed manufacturing overhead costs are $8,300 for depreciation and $4,500 for supervision. In the current month, Wade actually produced 7,400 units and incurred the following costs: direct materials $52,300, direct labor $74,700, variable overhead $126,000, depreciation $8,300, and supervision $4,740. Prepare a static budget report. Hint: The Budget column is based on estimated production while the Actual column is the actual cost incurred during the period.

Explanation / Answer

STATIC BUDGET REPORT ACTUAL BUDGET VARIANCE Direct material 52300 6900*8=55200 -2900 F Direct labor 74700 6900*11= 75900 -1200 F Variable overhead 126000 6900*17= 117300 8700U Depreciation 8300 8300 0NA supervision 4740 4500 240 U Total manufacturing cost 266040 261200 4840 U

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