Ray Company provided the following excerpts from its Production Department\'s fl

Question

Ray Company provided the following excerpts from its Production Department's flexible budget performance report. (Round "rate per hour" answers to 2 decimal places. Indicate the effect of each variance by selecting "F for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) Ray Company Production Department Flexible Budget Performance Report For the Month Ended August 31 Actual Results FlexibleA Budget Planning Budget Spending Variances Activity Variances Labor-hours (q) 9,580 9,100 S 185,130 S 182,020 Direct labor Indirect labor Utilities Supplies Equipment depreciation( Factory administration Total expense q) S 3,760 F S 17,100 1.00 S 7,500+ q) q) S5,080 816 U 144 S 1,550 U 22,970 S 4,544 S 4,400 01 None 01 None 80,900 18,900 S 345,648

Explanation / Answer

Actual Spending variance Flexible Activity variance planning results budget budget labor hours(q) 9,580 9,580 9,100 direct labor 19 q 185,130 3,110 U 182,020 9,120 U 172900 indirect labor 7520 $1 q 13340 3,760 F 17,100 480 U 16620 utilities 7,500 1.7q 25336 1,550 U 23786 816 U 22,970 supplies 5,080 536 U 4,544 144 U 4,400 Equipment depreciation 80,900 80,900 $0 None 80,900 0 none 80,900 factory administration 18,900 1.90q 35,862 1,240 F 37102 912 U 36190 total expense 345,648 196 U 345,452 11,472 U 333980 utilities lab hour cost high 9,580 23,786 low 9,100 22,970 difference 480 816 variablecost per hour = 816/480 1.7 fixed cost = 23,786 - 9580*1.7 7500

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