B&L; Landscapes, Inc. Mini Practice Part 5 Bill Graham and Larry Miller incorpor
ID: 2580222 • Letter: B
Question
B&L; Landscapes, Inc. Mini Practice Part 5 Bill Graham and Larry Miller incorporated B&L; Landscapes, Inc. on July 1, 2016. The business consists of lawn care and sprinkler system installations. In addition, they also sell two types of fertilizer During 2017, B&L; Landscapes, Inc. acquired a 30% interest in Crestline Pipe. The president of Crestline wants to develop a management report to evaluate Manufacturing Overhead costs Bill and Larry want to help and have volunteered your services to provide some managerial reporting for Crestline Crestline Pipe distributes high-quality PVC pipe and has the following information for the month of March, 2018 Crestline Pipe Manufacturing Overhead Budget (Static) For the Month of March, 2018 Budgeted production in LF Budgeted costs 117500 Utilities ($0.45/DLH) Maintenance ($0.25/DLH) Salaries Depreciation Property taxes Insurance Janitorial Indirect materials ($0.30/DLH) 7,050 Indirect labor ($0.50/DLH 11,750 10,575 5,875 42,000 16,800 2,500 1,200 1300 $99,050 Total budgeted costs Crestline Pipe Manufacturing Overhead Costs (Actual) For the Month of March, 2018 Actual production in LF 118,500 Actual costs Indirect materials Indirect labor Utilities Maintenance Salaries Depreciation Property taxes Insurance Janitorial 7,100 11,825 10,700 5,900 42,000 16,800 2,500 1,200 1300 $99,325 Total budgeted costs Crestline Pipe had the following static budget and overhead costs for March. Manufacturingg overhead is budgeted based on direct labor hours (DLH). Direct labor is budgeted at 12 minutes per linear foot (LF)Explanation / Answer
B&L LANDSCAPES, INC. Manufacturing Overhead Flexible Budget For the Month of March, 2018 Production in LF 115,500 116,500 117,500 118,500 119,500 Variable Costs Indirect Materials($0.30 x LF x 12/60 Min) 6,930 6,990 7,050 7,110 7,170 Indirect Labor ($0.50 x LF x 12/60 Min) 11,550 11,650 11,750 11,850 11,950 Utilities ($0.45 x LF x 12/60 Min) 10,395 10,485 10,575 10,665 10,755 Maintenance ($0.25 x LF x 12/60 Min) 5,775 5,825 5,875 5,925 5,975 Total Variable Costs 34,650 34,950 35,250 35,550 35,850 Fixed Costs Salaries 42,000 42,000 42,000 42,000 42,000 Depreciation 16,800 16,800 16,800 16,800 16,800 Property Taxes 2,500 2,500 2,500 2,500 2,500 Insurance 1,200 1,200 1,200 1,200 1,200 Janitorial 1,300 1,300 1,300 1,300 1,300 Total Fixed Costs 63,800 63,800 63,800 63,800 63,800 Total Budgeted Costs 98,450 98,750 99,050 99,350 99,650 B&L LANDSCAPES, INC. Manufacturing Overhead Flexible Budget Report For the Month of March, 2018 Budget Actual Difference Favorable/ Unfavorable Production in LF 118,500 118,500 Variable Costs Indirect Materials 7,110 7,100 10 F Indirect Labor 11,850 11,825 25 F Utilities 10,665 10,700 35 U Investigate Maintenance 5,925 5,900 25 F Total Variable Costs 35,550 35,525 25 F Fixed Costs Salaries 42,000 42,000 - Depreciation 16,800 16,800 - Property Taxes 2,500 2,500 - Insurance 1,200 1,200 - Janitorial 1,300 1,300 - Total Fixed Costs 63,800 63,800 - Total Budgeted Costs 99,350 99,325 25 F B&L LANDSCAPES, INC. Responsibility Report Manufacturing Overhead For the Month of March, 2018 Budget Actual Difference Favorable/ Unfavorable Controllable Cost Indirect Materials 7,110 7,100 10 F Indirect Labor 11,850 11,825 25 F Utilities 10,665 10,700 35 U Maintenance 5,925 5,900 25 F Manufacturing manager should try to search the reason behind the excess Utilities expense, since due to excess utilities expense his performance is not remarkable to the point, it should be otherwise.
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