Flexible Budget

In an attempt to improve budgeting, the controller for Meliore, Inc., has developed a flexible budget for overhead costs. Meliore, Inc., makes two types of products, the standard model and the deluxe model. Meliore expects to produce 300,000 units of the standard model and 120,000 units of the deluxe model during the coming year. The standard model requires 0.05 direct labor hour per unit, and the deluxe model requires 0.08. The controller has developed the following cost formulas for each of the four overhead items:

	Cost Formula
Maintenance	$34,600 + $1.25 DLH
Power	$0.50 DLH
Indirect labor	$68,200 + $2.30 DLH
Rent	$31,100

At the end of the year, Meliore, Inc., actually produced 310,000 units of the standard model and 115,000 of the deluxe model. The actual overhead costs incurred were:

Maintenance	$ 64,250
Power	12,430
Indirect labor	129,260
Rent	31,100

Required:

Prepare a performance report for the period. If there is no variance, enter "0" for the amount and select "NA" in the last column.

Meliore, Inc.
Performance Report
For the Year Ended December 31
	Actual	Budget	Variance
DLH for units produced	fill in the blank 1	fill in the blank 2	fill in the blank 3	NA
Production costs:
Maintenance	$fill in the blank 6	$fill in the blank 7	$fill in the blank 8	Favorable
Power	fill in the blank 11	fill in the blank 12	fill in the blank 13	Unfavorable
Indirect labor	fill in the blank 16	fill in the blank 17	fill in the blank 18	Unfavorable
Rent	fill in the blank 21	fill in the blank 22	fill in the blank 23	NA
Total	$fill in the blank 25	$fill in the blank 26	$fill in the blank 27	Unfavorable