Question

1. Performance Report Based on Budgeted and Actual Levels of Production

   Bowling Company budgeted the following amounts:

   Variable costs of production:
   Direct materials	3 pounds @ $0.60 per pound
   Direct labor	0.5 hr. @ $16.00 per hour
   VOH	0.5 hr. @ $2.20
   FOH:
   Materials handling	$6,200
   Depreciation	$2,600

   At the end of the year, Bowling had the following actual costs for production of 3,800 units:

   Direct materials	$6,800
   Direct labor	30,500
   VOH	4,200
   FOH:
   Materials handling	6,300
   Depreciation	$2,600

   Required:

   1. Calculate the budgeted amounts for each cost category listed above for the 4,000 budgeted units.
   $

   2. Prepare a performance report using a budget based on the expected production of 4,000 units. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number and if there are no entries enter "0" then select for "Not applicable".

   Bowling Company
   Performance Report
   	Actual	Budgeted	Variance
   Units produced
   Direct materials	$	$	$
   Direct labor
   Variable overhead
   Fixed overhead:
   Materials handling
   Depreciation
   Total	$	$	$

   3. Prepare a performance report using a budget based on the actual level of production of 3,800 units. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number and if there is no entries enter "0" then select for "Not applicable".

   Bowling Company
   Performance Report
   	Actual	Budgeted	Variance
   Units produced
   Direct materials	$	$	$
   Direct labor
   Variable overhead
   Fixed overhead:
   Materials handling
   Depreciation
   Total	$	$	$

Answer 1

Ans 1.
Bowling Company
Budget for 4000 units	Per units	Total Amt $
Units of Production		4000
Variable cost of Production
Direct Materials( 3 lb/unit@$0.6/lb)	$              1.80	$       7,200.00
Direct Labor (0.5Hr/Unit , @$16/Hr)	8.00	$     32,000.00
VOH (0.5Hr/Unit @$2.2/Hr)	$              1.10	$       4,400.00
Tota Variable costs		$     43,600.00
FOH
Material Handling		$       6,200.00
Depreciation		$       2,600.00
Total FOH		$       8,800.00
Total Cost of Production		$     52,400.00

Ans 2.
Performance Report;	Actual	Budget	Variance
Units Produced	3,800	4,000	200
Direct Materials	$            6,800	$       7,200.00	$          (400.00)
Direct Labor	$          30,500	$     32,000.00	$       (1,500.00)
Variable Overhead:	$            4,200	$       4,400.00	$          (200.00)
Fixed Overhead
Material Handling	$            6,300	$       6,200.00	$            100.00
Depreciation	$            2,600	$       2,600.00	0
Total	$          50,400	$           52,400	$       (2,000.00)

Ans 3.
Budget for 3800 units	Per units	Total Amt $
Units of Production		3800
Variable cost of Production
Direct Materials( 3 lb/unit@$0.6/lb)	$              1.80	$       6,840.00
Direct Labor (0.5Hr/Unit , @$16/Hr)	8.00	$     30,400.00
VOH (0.5Hr/Unit @$2.2/Hr)	$              1.10	$       4,180.00
Tota Variable costs		$     41,420.00
FOH
Material Handling		$       6,200.00
Depreciation		$       2,600.00
Total FOH		$       8,800.00
Total Cost of Production		$     50,220.00

Performance Report;	Actual	Budget	Variance
Units Produced	3,800	3,800	-
Direct Materials	$            6,800	$       6,840.00	$            (40.00)
Direct Labor	$          30,500	$     30,400.00	$            100.00
Variable Overhead:	$            4,200	$       4,180.00	$              20.00
Fixed Overhead
Material Handling	$            6,300	$       6,200.00	$            100.00
Depreciation	$            2,600	$       2,600.00	0
Total	$          50,400	$           50,220	$            180.00