Bennett Company's budgeted prices for direct materials, direct manufacturing labour, and direct marketing $($distribution$)$ labour per attach case are $ $38,$ $ $8,$ and $ $14,$ respectively. The president is pleased with the following performance report:

Actual Costs

Static Budget

Variance

Direct materials

$$397,200$

$$433,200$

$$36,000$

F

Direct manufacturing labour

$89,600$

$91,200$

$1,600$

F

Direct marketing $($distribution$)$ labour

$147,600$

$159,600$

$12,000$

F

Actual output was $10$ comma $400$ attach cases. Assume all three direct$-$cost items above are variable costs.

Requirement

Is the president's pleasure justified? Prepare a revised performance report that uses a flexible budget and a static budget.

Question content area bottom

Part $1$

Prepare a revised performance report that uses a flexible budget and a static budget. Begin with the actual results, then complete the flexible budget columns and the static budget columns. Label each variance as favourable or unfavourable. $($For variances with a $$0$ balance, make sure to enter $"0"$ in the appropriate field. If the variance is zero, do not select a label.$)$

Actual Results

Flexible$-$Budget Variance

Flexible Budget

Sales$-$Volume Variance

Static Budget

Output units

Direct materials

Direct manufacturing labour

Direct marketing labour

Total direct costs

Part $2$

Is the president's pleasure justified?

The existing performance report is a

Level $1$

Level $2$

analysis, based on a static budget. It makes

an adjustment

no adjustment

for changes in output levels.

Part $3$

The existing performance report shows a

favourable

unfavourable

total direct cost variance of $

enter your response here. The revised performance report reveals that this variance is due to the

decrease

increase

in output units from the amount budgeted. The president should analyze the

efficiency variance

price variance

price and efficiency variances

for each cost category to assist in identifying the causes.

The existing performance report is aanalysis, based on a static budget.It makesfor changes in output levels.The existing performance report shows atotal direct cost variance of $total direct cost variance of $$.$ The revised performance report reveals that this variance is due to theThe revised performance report reveals that this variance is due to thein output units from the amount budgeted.The president should analyze thefor each cost category to assist in identifying the causes.

Question content area top

Part $1$

Bennett Company's budgeted prices for direct materials, direct manufacturing labour, and direct marketing $($distribution$)$ labour per attach case are $ $38,$ $ $8,$ and $ $14,$ respectively. The president is pleased with the following performance report:

Actual Costs

Static Budget

Variance

Direct materials

$$397,200$

$$433,200$

$$36,000$

F

Direct manufacturing labour

$89,600$

$91,200$

$1,600$

F

Direct marketing $($distribution$)$ labour

$147,600$

$159,600$

$12,000$

F

Actual output was $10$ comma $400$ attach cases. Assume all three direct$-$cost items above are variable costs.

Requirement

Is the president's pleasure justified? Prepare a revised performance report that uses a flexible budget and a static budget.

Question content area bottom

Part $1$

Prepare a revised performance report that uses a flexible budget and a static budget. Begin with the actual results, then complete the flexible budget columns and the static budget columns. Label each variance as favourable or unfavourable. $($For variances with a $$0$ balance, make sure to enter $"0"$ in the appropriate field. If the variance is zero, do not select a label.$)$

Actual Results

Flexible$-$Budget Variance

Flexible Budget

Sales$-$Volume Variance

Static Budget

Output units

Direct materials

Direct manufacturing labour

Direct marketing labour

Total direct costs

Part $2$

Is the president's pleasure justified?

The existing performance report is a

Level $1$

Level $2$

analysis, based on a static budget. It makes

an adjustment

no adjustment

for changes in output levels.

Part $3$

The existing performance report shows a

favourable

unfavourable

total direct cost variance of $

enter your response here. The revised performance report reveals that this variance is due to the

decrease

increase

in output units from the amount budgeted. The president should analyze the

efficiency variance

price variance

price and efficiency variances

for each cost category to assist in identifying the causes.

The existing performance report is aanalysis, based on a static budget.It makesfor changes in output levels.The existing performance report shows atotal direct cost variance of $total direct cost variance of $$.$ The revised performance report reveals that this variance is due to theThe revised performance report reveals that this variance is due to thein output units from the amount budgeted.The president should analyze thefor each cost category to assist in identifying the causes.