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 $,$$$34,300+$$$1\mathrm{.}25DLH$

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

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

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 $$57,200$

Power $,9,710$

Indirect labor $117,040$

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 $31$

Actual Budget Variance

DLH for units produced

Production costs:

Total