Comprehensive review of Chapters 15 and 16, static budget. (15 minutes) LEvnement du Dimanche budgets to produce

Comprehensive review of Chapters 15 and 16, static budget.

(15 minutes) LEvénement du Dimanche budgets to produce 300,000 copies of its monthly newspaper for August 2002. It is budgeted to run 15,000,000 print pages in August with 50 print pages per newspaper.

Actual production in August 2002 was 320,000 copies with 17,280,000 print pages run. Each paper was only 50 print pages, but quality problems with paper led to many pages being unusable.

Variable costs comprise direct materials, direct labour, and variable indirect costs. Variable and fixed indirect costs are allocated to each copy on the basis of print pages. The driver for all variable costs is the number of print pages. Data pertaining to August 2002 are 

[’Evéenement du Dimanche sells for SFr 0.50 per copy in 2002. No change from this budgeted price of SFr 0.50 per copy occurred in August 2002. The actual direct labour rate in August 2000 was SFr 29.00 per hour.
Actual and budgeted pages produced per direct labour hour in August 2000 were 10,000 print pages. Copies produced but not sold have no value. Advertising revenue covers payments from all advertising sources. nju REQUIRED 1. Present a static-budget variance (Level 1) report for LEvénement du Dimanche.
2. Comment on the results in requirement 1.

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Direct materials Direct labour costs Variable indirect costs Fixed indirect costs BUDGETED SFr 180,000 ACTUAL 50,112 SFr 224,640 45,000 60,000 90,000 63.936 97,000 Data pertaining to revenues for L'Evnement du Dimanche in August 2002 are BUDGETED ACTUAL Circulation revenue SFr 140,000 SFr 154,000 Advertising revenue 360,000 394,600