Question
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.
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 |
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Direct Labor |
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Variable Manufacturing Overhead |
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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)
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