Flexible Budgeting 25%

The budgeted unit costs for Connor Company for direct materials, direct labor and variable manufacturing overhead are $40, $8 and $12, respectively. The vice-president appears satisfied with the following performance report, because all of the variances are favorable:

	Actual Costs	Master (Static) Budget	Variance
Direct Materials	$364,000	$400,000	$36,000 F
Direct Labor	78,000	80,000	2,000 F
Var Mfg Overhead	110,000	120,000	10,000 F

!0,000 units were budgeted. The actual number of units produced was 8,000.

a. Prepare a performance evaluation report that uses a flexible and a static budget. Please assume that all the costs are variable. (The variance analysis detail is not required for this question).(20 pts)

Account	Actual Cost	Flex Budget	Act Var with Flex Budget	Static Budget	Act Var with Static Budget
Direct Material
Direct Labor
Variable Manufacturing Overhead

b. Is the vice-presidents satisfaction justified (answer after you complete part a.)?(5 pts)

Question 2" Flexible Budgeting 25% The budgeted unit costs for Connor Company for direct materials, direct labor and variable manufacturing overhead are $40, $8 and $12, respectively. The vice-president appears satisfied with the following performance report, because all of the variances are favorable Actual Costs $364,000 78,000 110,000 Master (Static) Budget $400,000 80,000 120,000 Variance Direct Materials Direct Labor Var Mfg Overhead $36,000F 2,000 F 10,000 F 0,000 units were budgeted. The actual number of units produced was 8,000 a. Prepare a performance evaluation report that uses a flexible and a static budget. Please assume that all the costs are variable (The variance analysis detail is not required for this question)(20 pts) Actual Cost Flex Budget Act Var with Static Act Var with Static Budget Account Flex Budget Budget Direct Material Direct Labor Variable Manufacturing Overhead b. Is the vice-president's satisfaction justified (answer after you complete part a.)?(5 pts)