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Waterways Waterways Corporation is continuing its budget preparations. Waterways had the following static budget and actual...
Waterways
Waterways Corporation is continuing its budget preparations. Waterways had the following static budget and actual overhead for March. (Refer to Waterways 9 if you are uncertain about variable versus fixed costs.)
Waterways Corporation Waterways Corporation
Manufacturing Overhead Budget Manufacturing Overhead Costs (Actual)
(Static) For the Month of March For the Month of March
|
Budgeted Production (Units) |
118,000 |
Production in units |
118,500 |
|
|
Indirect materials |
$ 5,900 |
Indirect materials |
$ 5,910 |
|
|
Indirect labor |
14,160 |
Indirect labor |
14,195 |
|
|
Utilities |
11,800 |
Utilities |
11,880 |
|
|
Maintenance |
8,260 |
Maintenance |
8,275 |
|
|
Salaries |
42,000 |
Salaries |
42,100 |
|
|
Depreciation |
16,800 |
Depreciation |
16,800 |
|
|
Property taxes |
3,000 |
Property taxes |
3,000 |
|
|
Insurance |
1,200 |
Insurance |
1,200 |
|
|
Janitorial |
1,500 |
Janitorial |
1,650 |
|
|
Total budgeted costs |
$104,620 |
Total costs |
$105,010 |
Waterways produced 118,500 units in March rather than the budgeted number of units.
Instructions:
a. Prepare a flexible budget overhead budget based on the following amounts produced.
(1) 115,000 units
(2) 116,000 units
(3) 117,000 units
(4) 118,000 units
(5) 119,000 units
b. Prepare a flexible budget performance report showing the differences (favorable and unfavorable) in manufacturing overhead costs for the month of March.
c. Prepare a responsibility report for the manufacturing overhead for March assuming only variable costs are controllable.
Solutions
Expert Solution
| a) Water Way Corporation | |||||||
| Manufacturing Overhead Flexible Budget | |||||||
| Prodution Unit | |||||||
| Production in Unit | Per Unit Cost | 118000 | 115000 | 116000 | 117000 | 118500 | 119000 |
| Variable Cost | |||||||
| Indirect Materal | $0.05 | $5,900 | $5,750 | $5,800 | $5,850 | $5,925 | $5,950 |
| Indirect Labour | $0.12 | $14,160 | $13,800 | $13,920 | $14,040 | $14,220 | $14,280 |
| Utilities | $0.10 | $11,800 | $11,500 | $11,600 | $11,700 | $11,850 | $11,900 |
| Maintainance | $0.07 | $8,260 | $8,050 | $8,120 | $8,190 | $8,295 | $8,330 |
| Fixed Cost | |||||||
| Salaries | $42,100 | $42,100 | $42,100 | $42,100 | $42,100 | $42,100 | |
| Depreciation | $16,800 | $16,800 | $16,800 | $16,800 | $16,800 | $16,800 | |
| Property Tax | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | |
| Insurance | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | |
| Janitorial | $1,650 | $1,650 | $1,650 | $1,650 | $1,650 | $1,650 | |
| Total Budgeted Cost | $1,04,870 | $1,03,850 | $1,04,190 | $1,04,530 | $1,05,040 | $1,05,210 | |
| b) Water Way Corporation | |||||
| Manufacturing Overhead Flexible Budget Report | |||||
| Budget | Actual | Difference | |||
| Production in Unit | 118500 | 118500 | |||
| Variable Cost | |||||
| Indirect Materal | $5,925 | $5,910 | $15 | F | |
| Indirect Labour | $14,220 | $14,195 | $25 | F | |
| Utilities | $11,850 | $11,880 | -$30 | U | |
| Maintainance | $8,295 | $8,275 | $20 | F | |
| Fixed Cost | |||||
| Salaries | $42,100 | $42,100 | $0 | ||
| Depreciation | $16,800 | $16,800 | $0 | ||
| Property Tax | $3,000 | $3,000 | $0 | ||
| Insurance | $1,200 | $1,200 | $0 | ||
| Janitorial | $1,650 | $1,650 | $0 | ||
| Total Budgeted Cost | $1,05,040 | $1,05,010 | $30 | F | |
| Waterway Corporation | ||||
| Responsibility Report | ||||
| Manufacturing Overhead | ||||
| Controllable Cost | Budget | Actual | Difference | |
| Indirect Materal | $5,925 | $5,910 | $15 | F |
| Indirect Labour | $14,220 | $14,195 | $25 | F |
| Utilities | $11,850 | $11,880 | -$30 | U |
| Maintainance | $8,295 | $8,275 | $20 | F |
| $40,290 | $40,260 | $30 | F | |
ekkarill92 answered 2 years agoRelated Solutions
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