Question

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.

Answer 1

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