Flexible Budget In an attempt to improve budgeting, the controller for Engersol, Inc., has developed a...

Transcribed Image Text:

Flexible Budget In an attempt to improve budgeting, the controller for Engersol, Inc., has developed a flexible budget for overhead costs. Engersol, Inc., makes two types of products, commercial floor cleaners and household floor cleaners. The company expects to produce 300,000 units of the commercial cleaner and 120,000 units of the household cleaner during the coming year. The commercial cleaner requires 0.04 direct labor hour per unit, and the household cleaner requires 0.06. The controller has developed the following cost formulas for each of the four overhead items: Maintenance Power Indirect labor Rent Cost Formula $34,300 + $1.25 DLH $0.50 DLH $68,200 + $2.30 DLH $31,700 At the end of the year, Engersol, Inc., actually produced 310,000 units of the commercial cleaner and 115,000 of the deluxe model. The actual overhead costs incurred were: Maintenance Power $ 57,150 9,710 Indirect labor 116,840 31,700 Rent 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. Engersol, Inc. Performance Report For the Year Ended December 31 Actual Budget Variance DLH for units produced Production costs: Total Flexible Budget In an attempt to improve budgeting, the controller for Engersol, Inc., has developed a flexible budget for overhead costs. Engersol, Inc., makes two types of products, commercial floor cleaners and household floor cleaners. The company expects to produce 300,000 units of the commercial cleaner and 120,000 units of the household cleaner during the coming year. The commercial cleaner requires 0.04 direct labor hour per unit, and the household cleaner requires 0.06. The controller has developed the following cost formulas for each of the four overhead items: Maintenance Power Indirect labor Rent Cost Formula $34,300 + $1.25 DLH $0.50 DLH $68,200 + $2.30 DLH $31,700 At the end of the year, Engersol, Inc., actually produced 310,000 units of the commercial cleaner and 115,000 of the deluxe model. The actual overhead costs incurred were: Maintenance Power $ 57,150 9,710 Indirect labor 116,840 31,700 Rent 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. Engersol, Inc. Performance Report For the Year Ended December 31 Actual Budget Variance DLH for units produced Production costs: Total