Question

In: Accounting

Question is in bold at the end of my worksheet For the month of: November Budget...

Question is in bold at the end of my worksheet

For the month of: November
Budget Data
Fixed Variable Actual
Portion Portion* Data
Depreciation $4,000         -- $4,000
Maintenance $1,800 $0.70 4,730
Inspections $2,800 0.25 3,702
Utilities $4,000 0.20 4,900
Indirect material 0.25 1,125
Overtime 2.25 ** 260
*per direct labor hour
**per monthly direct labor hours in excess of 4,000
Planned direct labor hours for the month 4,500
Actual direct labor hours for the month 4,100
Static Budget Budget Actual Difference
Depreciation $4,000 $4,000 $0
Maintenance 4,950 4,730 220
Inspections 3,925 3,702 223
Utilities 4,900 4,900 0
Indirect material 1,125 1,125 0
Overtime 1,125 260 865
$20,025 $18,717 $1,308
Flexible Budget Budget Actual Difference
Depreciation $4,000 $4,000 $0
Maintenance 4,670 4,730 (60)
Inspections 3,825 3,702 123
Utilities 4,820 4,900 (80)
Indirect material 1,025 1,125 (100)
Overtime 225 260 (35)
$18,565 $18,717 ($152)
  1. The following actual overhead costs were incurred in December:

Depreciation

$4,000

Maintenance

$5,150

Inspections

$3,790

Utilities

$4,900

Indirect material

$1,350

Overtime

$1,125

1. Planned direct labor hours were 4,000. Actual direct labor hours were 4,500. Other budget data for December were identical to November except that fixed maintenance costs have increased to $2,000 and variable indirect materials costs have increased to $0.30 per direct labor hour.

a. Prepare and print new budget reports for December. Remember to change the month in cell B7. Save your file as FLEXBUD4. Compare the two budget reports and comment on the differences disclosed between the static budget and flexible budget performance reports.

b. If you were to suggest a revision to the budget for December, which cost category seems most in need of revision? Assuming that the fixed cost component of this budgeted cost is already correct, what should the variable cost component be so that the budget equals actual? Try difference values in the appropriate cell in the Data Section and write your answer below

Solutions

Expert Solution

For the month of: December
Budget Data Static Flexible
Fixed Variable Budget Budget Actual
Portion Portion* Value Value Data
Depreciation $4,000         -- $4000 $4,000 $4,000
Maintenance $2000 $0.70 $4,800 $5,150 5,150
Inspections $2,800 0.25 $3,800 $3,925 3,790
Utilities $4,000 0.2 $4,800 $4,900 4,900
Indirect material 0.3 $1,200 $1,350 1,350
Overtime 2.25** Nil $1,125 1,125
*per direct labor hour
**per monthly direct labor hours in excess of 4,000
Planned direct labor hours for the month 4,000
Actual direct labor hours for the month 4,500
Static Budget Budget Actual Difference
Depreciation 4,000 4,000 0
Maintenance 4,800 5,150 -350
Inspections 3,800 3,790 10
Utilities 4,800 4,900 -100
Indirect material 1,200 1,350 -150
Overtime 0 1,125 -1,125
18,600 20,315 -1,715
Flexible Budget Budget Actual Difference
Depreciation 4,000 4,000 0
Maintenance 5,150 5,150 0
Inspections 3,925 3,790 135
Utilities 4,900 4,900 0
Indirect material 1,350 1,350 0
Overtime 1,125 1,125 0
20,450 20,315 135
Static Budget Performance Report
Static Budget Budget Actual Variance
Depreciation 4,000 4,000 0
Maintenance 4,800 5,150 $350 U
Inspections 3,800 3,790 $10 F
Utilities 4,800 4,900 $100 U
Indirect material 1,200 1,350 $150 U
Overtime 0 1,125 $1,125 U
18,600 20,315 $1,715 U
Flexible Budget Performance report
Flexible Budget Budget Actual Difference
Depreciation 4,000 4,000 0
Maintenance 5,150 5,150 0
Inspections 3,925 3,790 $135 F
Utilities 4,900 4,900 0
Indirect material 1,350 1,350 0
Overtime 1,125 1,125 0
20,450 20,315 $135 F
(a) Compare the two budget reports and comment on the differences disclosed between the static budget and flexible budget performance reports.
In static budget for December month, the overall performance is not favourable in comparison to budgeted expenses but in case of Flexible budget for December month
the overall performance is more satisfactory as the actual expenses are less than the budgeted expenses hence, favourable for the business.
(b) If you were to suggest a revision to the budget for December, which cost category seems most in need of revision? Assuming that the fixed cost component of this budgeted cost is already correct, what should the variable cost component be so that the budget equals actual?
In case of static budget almost all the variable components need revision but in flexible budget overall performance is good.

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

This is a critical thinking question. I know the answers. My question is in bold below...
This is a critical thinking question. I know the answers. My question is in bold below the textbook question. Ch 13, #57PE - A deep-sea diver should breath a gas mixture that has rthe same oxygen partial pressure as at sea level, where dry air contains 20.9% oxygen and has a total pressure of 1.01x105 N/m2. When developing a strategy for solving this problem, how can the given information and the principles that govern this context lead me to what...
This company needs to create their worksheet at the end of the month with the following...
This company needs to create their worksheet at the end of the month with the following information *Fill in the Worksheet (Adjust the entries, create the Adjusted Trial Balance, Income Statement and Balance Sheet) Write the correct answer in the white and orange boxes Transactions: 1 At the end of the period I have 500 of supplies on hand 2. Depreciation is 250 for the period 3. Interest accrued for the period for 400 4. Insurance expires at a rate...
Sheridan Entertainment Corporation prepared a master budget for the month of November that was based on...
Sheridan Entertainment Corporation prepared a master budget for the month of November that was based on sales of 153,000 board games. The budgeted income statement for the period is as follows. Sales Revenue $2,601,000 Variable expenses   Direct materials $703,800   Direct labor 290,700   Variable overhead 397,800 Total variable expenses 1,392,300 Contribution margin 1,208,700    Fixed overhead 253,900    Fixed selling and administrative expenses 508,600 Total fixed expenses 762,500 Operating income $446,200 During November, Sheridan produced and sold 187,300 board games. Actual results for...
I don't know how to build my last code for TestPairOfDice...below the question is in bold....
I don't know how to build my last code for TestPairOfDice...below the question is in bold. I'm including my code for the previous problems which are all needed for number 6 1. Implement a method named surface that accepts 3 integer parameters named width, length, and height as user input. It will return the total surface area (6 sides) of the rectangular box it represents. The formula for Surface Area is 2(length * width) + 2(length * height) + 2(height...
Assume that The AM Bakery is preparing a budget for the month ending November 30. Management...
Assume that The AM Bakery is preparing a budget for the month ending November 30. Management prepares the budget by starting with the actual results for August that is shown below. Then, management considers what the differences in costs will be between August and November. THE AM BAKERY Bakery sales Actual and Budgeted Costs For the Month Ending August 31 Actual Ingredients Flour $ 3,980 Butter 3,580 Oil 1,940 Fruit 1,540 Nuts 980 Chocolate 1,200 Other 800 Total ingredients $...
On November 30, the end of the first month of operations, Weatherford Company prepared the following...
On November 30, the end of the first month of operations, Weatherford Company prepared the following income statement, based on the absorption costing concept: Weatherford Company Absorption Costing Income Statement For the Month Ended November 30 1 Sales (22,000 units) $2,200,000.00 2 Cost of goods sold: 3 Cost of goods manufactured (25,200 units) $2,016,000.00 4 Inventory, November 30 (3,200 units) (256,000.00) 5 Total cost of goods sold 1,760,000.00 6 Gross profit $440,000.00 7 Selling and administrative expenses 160,000.00 8 Income...
On November 30, the end of the first month of operations, Weatherford Company prepared the following...
On November 30, the end of the first month of operations, Weatherford Company prepared the following income statement, based on the The reporting of the costs of manufactured products, normally direct materials, direct labor, and factory overhead, as product costs.absorption costing concept: Weatherford Company Absorption Costing Income Statement For the Month Ended November 30 Sales (5,900 units) $123,900 Cost of goods sold: Cost of goods manufactured (7,000 units) $105,000 Inventory, November 30 (1,000 units) (15,000) Total cost of goods sold...
Variable Costing Income Statement On November 30, the end of the first month of operations, Weatherford...
Variable Costing Income Statement On November 30, the end of the first month of operations, Weatherford Company prepared the following income statement, based on the absorption costing concept: Weatherford Company Absorption Costing Income Statement For the Month Ended November 30 Sales (2,500 units) $52,500 Cost of goods sold: Cost of goods manufactured (2,900 units) $43,500 Inventory, November 30 (400 units) (6,000) Total cost of goods sold 37,500 Gross profit $15,000 Selling and administrative expenses 8,530 Income from operations $6,470 Assume...
Garland Company Budget Performance Report—Supervisor, Chip Fabrication For the Month Ended November 30 Cost Actual Budget...
Garland Company Budget Performance Report—Supervisor, Chip Fabrication For the Month Ended November 30 Cost Actual Budget Over Budget Under Budget Factory wages $95,500 $82,000 $13,500 Materials 115,300 120,000 $(4,700) Power and light 49,950 45,000 4,950 Maintenance 37,200 28,000 9,200 $297,950 $275,000 $27,650 $(4,700) a. Complete the budget performance reports by determining the correct amounts for the lettered spaces (a-l) as marked above. a. $ g. $ b. $ h. $ c. $ i. $ d. $ j. $ e. $...
Question: CC4 It is the end of November and Natalie has been in touch with her...
Question: CC4 It is the end of November and Natalie has been in touch with her grandmother. Her grandmother asked Natalie how well things went in her first month of business. Natalie, too, would like to know if her business has been profitable or not during November. Natalie realizes that in order to determine Cookie Creations' income, she must first make adjustments. Debit Credit Cash 340 A/R 300 Supplies 220 Prepaid Ins 1200 Equipment 1200 Website 600 A/P 650 Unearned...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT