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 $0\mathrm{.}04$ direct labor hour per unit, and the household cleaner requires $0\mathrm{.}06.$ The controller has developed the following cost formulas for each of the four overhead items:

Cost Formula

Maintenance $$34,600+$ $$1\mathrm{.}25$ DLH

Power $$0\mathrm{.}50$ DLH

Indirect labor $$68,500+$ $$2\mathrm{.}30$ DLH

Rent $$31,100$

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 $ $57,450$

Power $9,710$

Indirect labor $117,140$

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.

Engersol, Inc.

Performance Report

For the Year Ended December $31$

blank Actual Budget Variance blank

DLH for units produced $-$ Select $--$ Select $--$ Select $-$

Production costs: blank blank blank blank

$$-$ Select $-$ $$-$ Select $-$ $$-$ Select $-$

$-$ Select $--$ Select $--$ Select $-$

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Total $$-$ Select $-$ $$-$ Select $-$ $$-$ Select $-$