Question
Adams Medical Equipment Company makes a blood pressure measuring kit. Jason McCoy is the production manager. The production departments static budget and actual results for
Adams Medical Equipment Company makes a blood pressure measuring kit. Jason McCoy is the production manager. The production departments static budget and actual results for 2019 follow:
Static Budget | Actual Results | ||||||||
Production in units | 23,000 kits | 25,100 kits | |||||||
Direct materials | $ | 177,100 | $ | 231,170 | |||||
Direct labor | 154,100 | 161,870 | |||||||
Variable manufacturing overhead | 34,500 | 39,550 | |||||||
Total variable costs | 365,700 | 432,590 | |||||||
Fixed manufacturing overhead | 211,000 | 206,200 | |||||||
Total manufacturing cost | $ | 576,700 | $ | 638,790 | |||||
Required
a. Convert the static budget into a flexible budget.
b. Calculate the variances.
Required A
Required B
Convert the static budget into a flexible budget. (Do not round intermediate calculations.)
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Required B
Calculate the variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)
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