Brief Exercise 22-5 Gundy Company expects to produce 1,268,400 units of Product

Question

Brief Exercise 22-5 Gundy Company expects to produce 1,268,400 units of Product XX in 2017. Monthly production is expecied to range from 84,700 to 116,900 un ts. Budgeted varable manufacturing costs per unt are: direct materais s5, direct labor $7, and overhead $9. Budgeted fixed manufacturng costs per unit for depreciaton are $6 and tor supervision are S3. In March 2017, the company incurs the tolowing costs in producing 100,800 units: direct materials $526,000, direct labor $698,600, and variable overhead $916,200. Actual fced costs were equal to budgeted fixed costs Prepare a flex ble budget report for March (List variable costs before fixed costs.) GUNDY COMPANY Manufacturing Fledble Budget Report For the Month Ended March 31, 2017 Difference Favorable Unfavorable Nelther Favorable nor Unfavorable Budget Actual Were costs controled? Click if you would like to Show Work for this question: Open Show Work

Explanation / Answer

Ans:

Particulars Per unit Budget for 1268400 units Budget for 100800 units Actual cost for 100800 units Difference Favourable/Unfavourable Material 5 6342000 504000 526000 - 22000 Unfavourable labour 7 8878800 705600 698600 7000 Favourable overhead 9 11415600 907200 916200 -9000 Unfavourable Total variable cost 26636400 2116800 2140800 -24000 Unfavourable Depreciation 7610400 604800 604800 0 No variance Supervision 3805200 302400 302400 0 No variance

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