Question

In: Accounting

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

Ray Company provided the following excerpts from its Production Department’s flexible budget performance report. (Round "rate per hour" answers to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Required:

Complete the Production Department’s Flexible Budget Performance Report.

Solutions

Expert Solution

The completed flexible budget performance report is as follows:

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).....................................

9,480

9,480

9,000

Direct labor ($14q)................................

$134,730

$2,010

U

$132,720

$6,720

U

$126,000

Indirect labor ($7,420 + $1.50q)...........

19,860

1,780

F

21,640

720

U

$20,920

Utilities ($6,500 + $0.70q)....................

14,586

1,450

U

13,136

336

U

12,800

Supplies ($1,600 + $0.30q)...................

4,940

496

U

4,444

144

U

4,300

Equipment depreciation ($78,400)........

78,400

0

78,400

0

78,400

Factory administration
($18,700 + $1.90q)............................

   35,572

1,140

F

   36,712

   912

U

   35,800

Total expense........................................

$288,088

$1,036

U

$287,052

$8,832

U

$278,220


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