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 163,200 units and had the following actual costs:

Direct materials	$1,170,000
Direct labor	258,000
Supplies	38,100
Maintenance	30,960
Power	29,300
Supervision	99,450
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	$	$	$	< >FavorableUnfavorableNA
Direct labor				< >FavorableUnfavorableNA
Supplies				< >FavorableUnfavorableNA
Maintenance				< >FavorableUnfavorableNA
Power				< >FavorableUnfavorableNA
Supervision				< >FavorableUnfavorableNA
Depreciation				< >FavorableUnfavorableNA
Other overhead				< >FavorableUnfavorableNA
Total cost	$	$	$	< >FavorableUnfavorableNA

Feedback

2. What if Nashler Companys actual direct materials cost were $1,175,040? How would that affect the variance for direct materials? If an amount is zero, enter "0". The materials variance would be $.

The total cost variance would

increase

decrease

zero

by $.