Using Flexible Budgets The following summary data are from a performance report for Sterling Company for...
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Using Flexible Budgets The following summary data are from a performance report for Sterling Company for May, during which 16,800 units were produced. The budget reflects the company's normal capacity of 17,500 units. Actual Cost Budget Direct material Direct labor Variable overhead Fixed overhead Total 16,800 units Variances $ 17,500 units $68,400 $70,000 $(1,600) Favorable 138,600 140,000 (1,400) Favorable 49,200 48,000 1,200 Unfavorable 36,200 36,000 200 Unfavorable $292,400 $294,000 $(1,600) a. Prepare a new performance report using flexible budgeting. Round all amounts to the nearest dollar. Actual Costs Flexible Budget Variance $ Direct material $ 0 $ 0 $ Direct labor 0 0 Variable overhead 0 0 Fixed overhead 0 0 Totals $ 0 $ 0 $ 0 0 = 0 0 0 b. Which of the two performance reports should Sterling Company management use to measure the company's operating efficiency in May? Using Flexible Budgets The following summary data are from a performance report for Sterling Company for May, during which 16,800 units were produced. The budget reflects the company's normal capacity of 17,500 units. Actual Cost Budget Direct material Direct labor Variable overhead Fixed overhead Total 16,800 units Variances $ 17,500 units $68,400 $70,000 $(1,600) Favorable 138,600 140,000 (1,400) Favorable 49,200 48,000 1,200 Unfavorable 36,200 36,000 200 Unfavorable $292,400 $294,000 $(1,600) a. Prepare a new performance report using flexible budgeting. Round all amounts to the nearest dollar. Actual Costs Flexible Budget Variance $ Direct material $ 0 $ 0 $ Direct labor 0 0 Variable overhead 0 0 Fixed overhead 0 0 Totals $ 0 $ 0 $ 0 0 = 0 0 0 b. Which of the two performance reports should Sterling Company management use to measure the company's operating efficiency in May?
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a To prepare a new performance report using flexible budgeting we need to calculate the flexible bud... View the full answer
Related Book For
Managerial Accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Posted Date:
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