How do I do the flexible budget report in part c?
Ratchet Company uses budgets in controlling costs. The August 2020 budget report for the company's Assembling Department is as follows. RATCHET COMPANY Budget Report Assembling Department For the Month Ended August 31, 2020 Difference Favorable Unfavorable Neither Favorable Manufacturing Costs Budget Actual nor Unfavorable Variable costs Direct materials $50,840 $49,840 $1,000 Favorable Direct labor 55,800 52,500 3,300 Favorable Indirect materials 27,280 27,480 200 Unfavorable Indirect labor 18,600 18,180 420 Favorable Utilities 18,600 18,460 140 Favorable Maintenance 9,920 10,220 300 Unfavorable Total variable 181,040 176,680 4,360 Favorable Fixed costs Rent 11,700 11,700 0 Neither Favorable nor Unfavorable Supervision 18,600 18,600 0 Neither Favorable nor Unfavorable Depreciation 7,700 7,700 0 Neither Favorable nor Unfavorable Total xed 38,000 38,000 0 Neither Favorable nor Unfavorable Total costs $219,040 $214,680 $4,360 Favorable The monthly budget amounts in the report were based on an expected production of 62,000 units per month or 744,000 units per year. The Assembling Department manager is pleased with the report and expects a raise, or at least praise for ajob well done. The company president, however, is unhappy with the results for August because only 60,000 units were produced. (a) & (b) V Your answer is correct. (a) State the total monthly budgeted cost formula. (Round cost per unit to 2 decimal places, ea. 1.25.) The formula is $ 38000 + variable costs of $ 2.92 per unit. (b) Prepare a budget report for August using exible budget data. (List variable costs before xed costs.) RATCHET COMPANY Assembling Department Flexible Budget Report For the Month Ended August 31, 2020 Difference Favorable Unfavorable Neither Favorable Budget Actual Cost: nor Unfavorable 60000 60000 Units 4} (b) Prepare a budget report for August using flexible budget data. (List variable costs before fixed costs.) RATCHET COMPANY Assembling Department Flexible Budget Report For the Month Ended August 31, 2020 Difference Favorable Unfavorable Neither Favorable Budget Actual Costs nor Unfavorable Units 60000 60000 Variable Costs Direct Materials 49200 HI $ 49840 $ 640 Unfavorable Direct Labor 54000 52500 1500 Favorable Indirect Materials 26400 HI 27480 1080 Unfavorable Indirect Labor 18000 18180 1 180 Unfavorable Utilities 18000 18460 460 Unfavorable Maintenance 9600 10220 620 Unfavorable Total Variable Costs 175200 176680 1480 H Unfavorable Fixed Costs Rent 11700 11700 i Neither FavorableSupervision 18600 18600 i i Neither Favorable Depreciation 7700 7700 Neither Favorable Total Fixed Costs 38000 i 38000 Neither Favorable Total Costs to 213200 $ 214680 i to 1480 Unfavorable eTextbook and Media Attempts: 4 of 5 used (c) - Your answer is partially correct. In September, 66,000 units were produced. Prepare the budget report using flexible budget data, assuming (1) each variable cost was 10% higher than its actual cost in August, and (2) fixed costs were the same in September as in August. (List variable costs before fixed costs.) RATCHET COMPANY Assembling Department Flexible Budget Report For the Month Ended September 30, 2020 Difference Favorable Unfavorable Neither FavorableNeither Favorable Budget Actual Costs nor Unfavorable Units 66000 66000 Variable Costs Direct Materials 54120 $ 54120 $ Unfavorable Direct Labor 59400 Favorable Indirect Materials 29040 Unfavorable Indirect Labor 19800 Unfavorable Utilities 19800 Unfavorable Maintenance 10560 Unfavorable Total Variable Costs 192720 Unfavorable Fixed Costs Rent 11700 11700 Neither Favorable nor Supervision 18600 18600 H. i Neither Favorable nor Depreciation 7700 7700 i Neither Favorable nor Total Fixed Costs 38000 38000 Neither Favorable nor Total Costs $ 230720 $ $ Unfavorable
