Let's look at the following Flexible budget problem: Maplewood Corporation manufactures a single product. The original...

Let's look at the following Flexible budget problem:

Maplewood Corporation manufactures a single product. The original budget for June was based on expected production of 7,500 units; actual production for June was 7,000 units. The original budget and actual costs for the manufacturing department are shown below:

...............................................................Original..…..Actual
............................................................... Budget….....Costs
Direct materials......................................$ 42,000.....$ 41,400
Direct labor...............................................51,000...…..42,600
Variable overhead.....................................32,250........31,300
Fixed overhead..........................................37,500........34,200
.........Total.............................................$162,750.....$149,500

We need to prepare an appropriate performance report for the manufacturing department. Take one of the cost items (DM, DL, Var. OH or Fixed OH), show us the original budget, then the actual cost and then the flexible budget amount and then the difference between the actual and flexible budget amount.

Expert Solution

Ans. Performance Report

Original Budget Flexibile budget Actual cost Difference

7500 units 7000units 7000units (Flexibile-actual)

Direct material 42000 39200 41400 -2200

Direct labour 51000 47600 42600 +5000

Variable overhead 32250 30100 31300 -1200

Fixed overhead 37500 37500 34200 +3300

Total cost 162750 154400 149500 +4900

ekkarill92 answered 2 years ago

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