Question
In: Accounting
Boyce Manufacturing Co.'s operates 3 profit centers. The clothing center’s static budget at 6,000 units of...
Boyce Manufacturing Co.'s operates 3 profit centers. The clothing center’s static budget at 6,000 units of production includes $30,000 for direct labor, $6,000 for direct materials, $12,000 for variable factory overhead, and controllable fixed costs of $24,000. Actual activity was 5,800 units with actual costs of $29,500 for direct labor, $11,500 for variable factory overhead, controllable fixed costs of $24,200, and $6,100 for direct materials. All units produced were budgeted to be sold for $16 each. Actual sales totaled $93,960. What variance will appear on the performance report for controllable margin?
Choose an answer:
A. 760F
B. 260F
C. 1,100F
D. 900U
Solutions
Expert Solution
| Correct Answer is B. 260 F. | |||||||
| The performance report shows the comparision at 5,800 actual units of budget and actual. | |||||||
| Sales Revenue | Actual | - | Budgeted | ||||
| Actual | $ 93,960 | - | $ 92,800 | = | 1160 | F | |
| Budgeted | (5,800 x 16) | ||||||
| Costs | Actual | - | Budgeted | ||||
| Direct Material | $ 6,100 | - | $ 5,800 | = | 300 | U | |
| Direct Labour | $ 29,500 | - | $ 29,000 | = | 500 | U | |
| Variable factory overhead | $ 11,500 | - | $ 11,600 | = | 100 | F | |
| controllable fixed cost | $ 24,200 | - | $ 24,000 | = | 200 | U | |
| Total cost | $ 71,300 | - | $ 70,400 | = | 900 | U | |
| Controllable margin | (Sales Revenue - Costs) | = | 260 | F | |||
| Workings:- | |||||||
| Costs | Per unit | Actual units | |||||
| Direct Material | ($ 6,000 / 6000 ) | = | $ 1 | X | 5800 | = | $ 5,800 |
| Direct Labour | ($ 30,000 / 6000 ) | = | $ 5 | X | 5800 | = | $ 29,000 |
| Variable factory overhead | ($ 12,000 / 6000 ) | = | $ 2 | X | 5800 | = | $ 11,600 |
ekkarill92 answered 1 year agoRelated Solutions
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Dept.
Sales
Cost of
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Direct
expenses
Indirect
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1
$1,100,000
$735,000
$110,000
$85,000
2
430,000
156,500
40,200
105,000
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305,000
165,000
21,000
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Selling and administrative costs
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$20
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Selling and administrative costs
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Total fixed costs
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Net income
$100,000
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Standard labor time per unit
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Standard price per yd. of fabric
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$12.00
Standard labor time per unit
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Standard number of yds. of fabric per unit
5.0 yds.
Standard price per yd. of fabric
$5.00
Actual price per yd. of fabric
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