How would I do the flexible budget report? What formulas? Thanks!
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 & Unfavorable Total variable 181,040 176,680 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 M 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 a job well done. The company president, however, is unhappy with the results for August because only 60,000 units were produced. 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 fixed 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 a job well done. The company president, however, is unhappy with the results for August because only 60,000 units were produced. (a) & (b) (a) State the total monthly budgeted cost formula. (Round cost per unit to 2 decimal places, e.g. 1.25.) The formula is $ 38000 + variable costs of $ 2.92 per unit. (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, 2020RATCHET COM PANY Assembling Department Flexible Budget Report For the Month Ended August 31, 2020 Difference Favorable Unfavorable Neither Favorable Budget Actual Costs nor Unfavorable Units 3 60000 60000 Variable Costs Direct Materials $ 62000 $ 0.8 $ c Direct Labor 0.9 0.85 Indirect Materials .44 0.44 Indirect Labor 03 0.29 C Utilities 3 0.3 0.3 3 Maintenance 0.16 0.16 Total Variable Costs 2.92 2.84 9 Fixed Costs Rent 6 4 4 Supervision
