Question

Wade Company estimates that it will produce 7,000 units of product IOA during the current month. Budgeted variable manufacturing costs per unit are direct materials $7, direct labor $13, and overhead $19. Monthly budgeted fixed manufacturing overhead costs are $8,200 for depreciation and $3,500 for supervision.

In the current month, Wade actually produced 7,500 units and incurred the following costs: direct materials $46,207, direct labor $89,300, variable overhead $141,645, depreciation $8,200, and supervision $3,710.

Prepare a static budget report. Hint: The Budget column is based on estimated production while the Actual column is the actual cost incurred during the period. (List variable costs before fixed costs.)

Answer 1

Wade Company
Static Budget Report
Particulars	Actual Results	Static Budget	variance	Favourable/Unfavourable
Units Produced	7500	7000	500	F
Variable Costs
Manufacturing :
Direct Materials	$      46,207.00	$      49,000.00	$ (2,793.00)	F
Direct Labour	$      89,300.00	$      91,000.00	$ (1,700.00)	F
Variable Overhead	$    141,645.00	$    133,000.00	$   8,645.00	U
Total variable Costs	$    277,152.00	$    273,000.00	$   4,152.00	U
Fixed Costs
Depreciation	$         8,200.00	$        8,200.00	$                -
Supervision	$         3,710.00	$        3,500.00	$       210.00	U
Total Fixed Costs	$      11,910.00	$      11,700.00	$       210.00	U
Total Manufacturing Costs	$    289,062.00	$    284,700.00	$   4,362.00	U

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