Acc560 Managerial Accounting: P10-3A Zelmer Company uses budgets in controlling costs

Acc560 Managerial Accounting
P10-3A
Zelmer Company uses budgets in controlling costs. The August 2008 budget report for the company's Assembling Department is as follows.
ZELMER COMPANY
Budget Report Assembling Department
For the Month Ended August 31, 2008
Difference Favorable F Manufacturing Costs Budget Actual Unfavorable U Variable costs
Direct materials 48,000 47,000 1,000 F
Direct labor 54,000 51,300 2,700 F
Indirect materials 24,000 24,200 200 U
Indirect labor 18,000 17,500 500 F
Utilities 15,000 14,900 100 F
Maintenance 9,000 9,200 200 U
Total variable 168,000 164,100 3,900 F
Fixed costs Rent 12,000 12,000 0
Supervision 17,000 17,000 0
Depreciation 7,000 7,000 0
Total fixed 36,000 36,000 0
Total costs 204,000 200,100 3,900 F

The monthly budget amounts in the report were based on an expected production of 60,000 units per month or 720,000 units per year. The Assembling Department manager is pleased with the report and expects a raise, or at least praise for a job well done. The company president, however, is unhappy with the results for August, because only 58,000 units were produced.

Instructions:
a. State the total monthly budgeted cost formula.
b. Prepare a budget report for August using flexible budget data. (If answer is zero, please enter 0. Do not leave any fields blank.)
c. In September, 64,000 units were produced. Prepare the budget report using flexible budget data, assuming (1) each variable cost was 10% higher than its actual cost in August, and (2) fixed costs were the same in September as in August.
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