Brief excersize 22-5 Gundy Company expects to produce 1,248,000 units of Product
ID: 2594860 • Letter: B
Question
Brief excersize 22-5Gundy Company expects to produce 1,248,000 units of Product XX in 2017. Monthly production is expected to range from 87,300 to 130,100 units. Budgeted variable manufacturing costs per unit are: direct materials $4, direct labor $6, and overhead $11. Budgeted fixed manufacturing costs per unit for depreciation are $6 and for supervision are $1.
In March 2017, the company incurs the following costs in producing 108,700 units: direct materials $458,800, direct labor $643,200, and variable overhead $1,203,700. Actual fixed costs were equal to budgeted fixed costs.
Prepare a flexible budget report for March. (List variable costs before fixed costs.)
Gundy Company expects to produce 1,248,000 units of Product XX in 2017. Monthly production is expected to range from 87,300 to 130,100 units. Budgeted variable manufacturing costs per unit are: direct materials $4, direct labor $6, and overhead $11. Budgeted fixed manufacturing costs per unit for depreciation are $6 and for supervision are $1. In March 2017, the company incurs the following costs in producing 108,700 units: direct materials $458,800 direct labor $643,200, and variable overhead $1,203,700. Actual fixed costs were equal to budgeted fixed costs Prepare a flexible budget report for March. (List variable costs before fixed costs GUNDY COMPANY Manufacturing Flexible Budget Report For the Month Ended March 31, 2017 Difference Favorable Unfavorable Neither Faverable nor Uefavorable Budget Actual Were costs controlled Click if you would like to Show Work for this question: Open Sh
Explanation / Answer
GUNDY COMPANY
Manufacturing Flexible Budget report
For the month ended March 31 2017
Budget
Actual
Difference
Units Produced
108700
108700
Variable costs:
Direct Materials at $4
434800
458800
-24000
U
Direct Labor $6
652200
643200
9000
F
Overhead $11
1195700
1203700
-8000
U
Total variable costs
2282700
2305700
-23000
U
Fixed cost
0
Depreciation (1248000*6/12)
624000
624000
0
Supervision (1248000*1/12)
104000
104000
0
Total fixed costs
728000
728000
0
Total costs
3010700
3033700
-23000
U
NO costs are not controlled
GUNDY COMPANY
Manufacturing Flexible Budget report
For the month ended March 31 2017
Budget
Actual
Difference
Units Produced
108700
108700
Variable costs:
Direct Materials at $4
434800
458800
-24000
U
Direct Labor $6
652200
643200
9000
F
Overhead $11
1195700
1203700
-8000
U
Total variable costs
2282700
2305700
-23000
U
Fixed cost
0
Depreciation (1248000*6/12)
624000
624000
0
Supervision (1248000*1/12)
104000
104000
0
Total fixed costs
728000
728000
0
Total costs
3010700
3033700
-23000
U
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