Question

Ray Company provided the following excerpts from its Production Department’s flexible budget performance report.

Required: Complete the Production Department’s Flexible Budget Performance Report.

Ray Company Production Department Flexible Budget Performance Report For the Month Ended August 31 Actual Results Spending Variances Flexible Budget Activity Variances Planning Budget Labor-hours (q) 9,590 9,110 Direct labor ( q) $190,125 $187,005 Indirect labor ( + $1.10 q) 3,394 F 18,079 Utilities ( $7,600 + q) 1,560 U 864 U 23,998 Supplies ( + q) 5,094 4,554 4,410 Equipment depreciation ( $81,150 ) 0 None 0 None Factory administration ( $18,920 + $1.00 q) Total expense $344,736

Answer 1

Ray Company
Production department flexible Budget performance report
For the month ended August 31
		Actual results	Spending Variances		Flexible Budget	Activity Variance		Planning Budget
Labor - hours	(q)	9590			9,590			9,110
Direct labor	( $20 q)	$   1,90,125	$    3,120	U	$1,87,005	$   9,360	U	$1,77,645
Indirect labor	($7530 + 1.10 q)	$      14,685	$    3,394	F	$    18,079	$       528	U	$    17,551
Utilities	($7600 + $1.80 q)	$      26,422	$    1,560	U	$    24,862	$       864	U	$    23,998
Supplies	( $1677 + 0.30 q)	$         5,094	$        540	U	$      4,554	$       144	U	$      4,410
Equipment depreciation	($81150)	$      81,150	$           -	None	$    81,150	$          -	None	$    81,150
Factory administration	($18920 + 1.00q)	$      27,260	$    1,250	F	$    28,510	$       480	U	$    28,030
Total expense		$   3,44,736	$        576	U	$3,44,160	$ 11,376	U	$3,32,784
Workings:
Direct labor	=	$187005 / 9590
		$               20
Utilities
	($7600 + z q) = $24862
	($7600 + z * 9590) = $24862
	z = $1.80
Indirect labor
	( r + 1.10q) = $18079
	( r + 1.10 X 9590) = $18079
	r = $7530
Supplies
Let:
	(x + yq) = 4554
also	(x + yq) = 4410
or	(x + y * 9590) = 4524
	(x + y* 9110) = 4380
	By computing above we get,
	x = $1677
	y = 0.30