Multiple Product Performance Report Storage Products manufactures two models of
ID: 2518045 • Letter: M
Question
Multiple Product Performance Report
Storage Products manufactures two models of DVD storage cases: regular and deluxe. Presented is standard cost information for each model:
Budgeted fixed manufacturing overhead is $16,000 per month. During July, the company produced 7,000 regular and 3,000 deluxe storage cases while incurring the following manufacturing costs:
Prepare a flexible budget performance report for the July manufacturing activities.
Cost Components Regular Deluxe Direct materials Lumber 2 board feet × $3 = $6.00 3 board feet × $3 = $9.00 Assembly kit = 2.00 = 2.00 Direct labor 1 hour × $4 = 4.00 1.25 hours × $4 = 5.00 Variable overhead 1 labor hr. × $2 = 2.00 1.25 labor hrs. × $2 = 2.50 Total $14.00 $18.50Explanation / Answer
ACTUAL FLEXIBLEBUDGET FLEXIABLE BUDGET VARIENCE VOLUME regular 7000 7000 delux 3000 3000 VARIABLE COST DIRECT MATERIAL regular 42000 (7000*6) delux 27000 (3000*9) ASSEMBLY KITS regular 14000 (7000*2) delux 6000 (3000*2) TOTAL 44000 43000 1000 Unfavourable DIRECT LABOUR regular 28000 (7000*4) delux 15000 (3000*5) TOTAL 90000 89000 1000 Unfavourable VARIABLE OVERHEADS regular 14000 (7000*2) delux 7500 (3000*2.5) TOTAL 18000 21500 3500 Favourable fixed ovberheads 18500 16000 2500 Unfavourable total 170500 169500 1000 Unfavourable
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