Flexible Budget for Varying Levels of Activity

Nashler Company has the following budgeted variable costs per unit produced:

Direct materials	$7.20
Direct labor	1.54
Variable overhead:
Supplies	0.23
Maintenance	0.19
Power	0.18

Budgeted fixed overhead costs per month include supervision of $98,000, depreciation of $76,000, and other overhead of $245,000.

In March, Nashler Company produced 170,000 units and had the following actual costs:

Direct materials	$1,220,000
Direct labor	268,300
Supplies	39,700
Maintenance	32,250
Power	30,520
Supervision	99,400
Depreciation	76,000
Other overhead	244,300

Required:

1. Prepare a performance report for Nashler Company comparing actual costs with the flexible budget for actual units produced. If there is no variance, enter "0" for the amount and select "NA" in the last column.

Nashler Company Performance Report

	Actual Cost	Flexible Budget Cost	Variance
Direct materials	$- Select -	$- Select -	$- Select -	FavorableUnfavorableNA
Direct labor	- Select -	- Select -	- Select -	FavorableUnfavorableNA
Supplies	- Select -	- Select -	- Select -	FavorableUnfavorableNA
Maintenance	- Select -	- Select -	- Select -	FavorableUnfavorableNA
Power	- Select -	- Select -	- Select -	FavorableUnfavorableNA
Supervision	- Select -	- Select -	- Select -	FavorableUnfavorableNA
Depreciation	- Select -	- Select -	- Select -	FavorableUnfavorableNA
Other overhead	- Select -	- Select -	- Select -	FavorableUnfavorableNA
Total cost	$- Select -	$- Select -	$- Select -	FavorableUnfavorableNA

2. What if Nashler Company's actual direct materials cost were $1,224,000? How would that affect the variance for direct materials? If an amount is zero, enter "0". The materials variance would be $fill in the blank fc4978064fce040_1.

The total cost variance would

increasedecrease

by $fill in the blank fc4978064fce040_3.