Question

Flexible Budget for Varying Levels of Activity Nashler Company has the following budgeted variable costs per unit produced: Direct materials $7.20 Direct labor 1.54 Variable overhead: Supplies 0.23 Maintenance 0.19 Power 0.18 Budgeted fixed overhead costs per month include supervision of $98,000, depreciation of $76,000, and other overhead of $245,000. In March, Nashler Company produced 170,000 units and had the following actual costs: Direct materials $1,220,000 Direct labor 268,300 Supplies 39,600 Maintenance 32,250 Power 30,520 Supervision 99,400 Depreciation 76,000 Other overhead 244,300 Required: 1. Prepare a performance report for Nashler Company comparing actual costs with the flexible budget for actual units produced. If there is no variance, enter "0" for the amount and select "NA" in the last column. Nashler Company Performance Report Actual Cost Flexible Budget Cost Variance Direct materials $ $ $ Favorable Direct labor Unfavorable Supplies Unfavorable Maintenance Favorable Power Favorable Supervision Unfavorable Depreciation NA Other overhead Favorable Total cost $ $ $ Unfavorable Feedback Budgets can be used to examine the efficiency and effectiveness of a company. 2. What if Nashler Company’s actual direct materials cost were $1,224,000? How would that affect the variance for direct materials? If an amount is zero, enter "0". The materials variance would be $ . The total cost variance would increase by $ .

Answer 1