Question

Performance Report Based on Budgeted and Actual Levels of Production

Bowling Company budgeted the following amounts:

Variable costs of production:
Direct materials	3 pounds @ $0.60 per pound
Direct labor	0.5 hr. @ $16.00 per hour
VOH	0.5 hr. @ $2.20
FOH:
Materials handling	$6,200
Depreciation	$2,600

At the end of the year, Bowling had the following actual costs for production of 3,800 units:

Direct materials	$6,800
Direct labor	30,500
VOH	4,200
FOH:
Materials handling	6,300
Depreciation	$2,600

Required:

1. Calculate the budgeted amounts for each cost category listed above for the 4,000 budgeted units.
$

2. Prepare a performance report using a budget based on expected production of 4,000 units. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number and if there is no entries enter "0" then select for "Not applicable".

Bowling Company
Performance Report
	Actual	Budgeted	Variance
Units produced
Direct materials	$	$	$
Direct labor
Variable overhead
Fixed overhead:
Materials handling
Depreciation
Total	$	$	$

3. Prepare a performance report using a budget based on the actual level of production of 3,800 units. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number and if there is no entries enter "0" then select for "Not applicable".

Bowling Company
Performance Report
	Actual	Budgeted	Variance
Units produced
Direct materials	$	$	$
Direct labor
Variable overhead
Fixed overhead:
Materials handling
Depreciation
Total	$	$	$

Answer 1

Solution 1:

Budgeted Cost - Bowling Company
Particulars	Amount
Variable cost:
Direct material (4000*3*$0.60)	$7,200.00
Direct labor (4000*0.5*$16)	$32,000.00
Variable overhead (4000*0.5*$2.20)	$4,400.00
Fixed overhead:
Materials handling	$6,200.00
Depreciation	$2,600.00
Budgeted Costs	$52,400.00

solution 2:

Bowling Company
Performance Report
Particulars	Actual	Budgeted	Variance
Units produced	3800	4000
Direct materials	$6,800.00	$7,200.00	-$400.00
Direct labor	$30,500.00	$32,000.00	-$1,500.00
Variable overhead	$4,200.00	$4,400.00	-$200.00
Fixed overhead:
Materials handling	$6,300.00	$6,200.00	$100.00
Depreciation	$2,600.00	$2,600.00	$0.00
Total	$50,400.00	$52,400.00	-$2,000.00

Solution 3:

Bowling Company
Performance Report
Particulars	Actual	Budgeted	Variance
Units produced	3800	3800
Direct materials	$6,800.00	$6,840.00	-$40.00
Direct labor	$30,500.00	$30,400.00	$100.00
Variable overhead	$4,200.00	$4,180.00	$20.00
Fixed overhead:
Materials handling	$6,300.00	$6,200.00	$100.00
Depreciation	$2,600.00	$2,600.00	$0.00
Total	$50,400.00	$50,220.00	$180.00