Im having a hard time with my budget variance sheet. Here is what I have so far and here are the details that my professor gave us as well as the budget worksheet that I got a 100% on last week.

Teachers details:

When you complete the Budget Variance Worksheet, you need to complete the Labor and Material Variance worksheet first. Before you try to calculate the variance amounts you need to determine the variables that you will need for the calculations.

For the labor variances these are:

1. Actual Cost - This is the actual cost per unit for labor during the quarter. This amount is given in the problem information. Specifically you need to look at critical element 2 and you will find the information in the first sentence (hint is is $15).
2. Actual Quantitiy - This is the actual amount of labor used during the quarter. This amount is also given in the problem information with the actual cost.
3. Standard Cost - This is the standard cost allowed for the quarter. It is the budgeted amount. Specifically you can find it as the cost per hour for labor on the Direct Labor budget (on your student worksheet).
4. Standard Quantity - This is the standard amount of labor (in hours) that were budgeted for the quarter. Specifically you can find it as the total labor hours on the Direct Labor budget (hint it is 30,000)

For the material variances these are:

1. Actual Cost - This is the actual cost per unit for materials during the quarter. This amount is given in the problem information. Specifically you need to look at critical element 2 and you will find the information in the first sentence (hint is is $7.75).
2. Actual Quantitiy - This is the actual amount of material used during the quarter. This amount is also given in the problem information with the actual cost.
3. Standard Cost - This is the standard cost allowed for the quarter. It is the budgeted amount. Specifically you can find it as the cost per unit for materials on the Raw Materials budget (on your student worksheet). In addition, do not let it confuse you when you find that this amount is the same as the actual cost (hint! hint!)
4. Standard Quantity - This is the standard amount of materials (in units) that were budgeted for the quarter. Specifically you can find it as the total labor amount of Raw Materials on the Raw Materials budget (hint it is 60,000)

Peyton Approved Budget Variance Report For the Year Ended ... Actual Results Direct materials variances Cost/price variance Efficiency variance Total direct materials variance Direct labor variances Cost /price variance Efficiency variance Total direct labor variance Static Budget Variance Favorable/ Unfavorable Labor variance actual quantity 33,000 actual cost $ 15.00 495,000 528,000 33,000 Favorable This is a favorable variance, because $1.00 less was spent for actual cost despite spending more on over all total price standard cost $ 16.00 Labor cost/price Variance Total Variance standard quantity 30,000 480,000 (48,000) Unfavorable Labor efficiency Variance This is an unfavorable variance, because while there was less quantity used $1.00 more on actual cost despite not having to use as many hours. (15000) Unfavorable Materials variance actual cost $ 7.75 actual quantity 31,000 standard cost $ 7.75 Favorable 224,750 standard quantity 27,380 You are a manager for Peyton Approved, a pet supplies manufacturer. This responsibility requires you to create budgets, make pricing decisions, and analyze the results of operations to determine if changes need to be made to make the company more efficient. You will be preparing a budget for the quarter July through September 2014. You are provided the following information. The budgeted balance sheet at June 30, 2014, is: Peyton Approved Budgeted Balance Sheet 30-Jun-15 ASSETS Cash $42,000 Accounts receivable 259,900 Raw materials inventory 35,650 Finished goods inventory 241,080 Total current assets 578,630 Equipment $720,000 Less accumulated depreciation 240,000 480,000 Total assets $1,058,630 LIABILITIES AND EQUITY Accounts payable Short-term notes payable Taxes payable Total current liabilities Long-term note payable Total Liabilities Common stock Retained earnings Total stockholders' equity Total liabilities and equity $63,400 24,000 10,000 97,400 300,000 397,400 $600,000 61,230 661,230 $1,058,630 All assumptions are new and apply to the July through September budget period. 1. Sales were 20,000 units in June 2015. Forecasted sales in units are as follows: July, 18,000; August, 22,000; September, 20,000; October, 24,000. The sales price per unit is $18.00 and the total product cost is $14.35 per unit. 2. The June 30 finished goods inventory is 16,800 units. 3. Company policy calls for a given month's ending finished goods inventory to equal 70% of the next month's expected unit sales 4. The June 30 raw materials inventory is 4,600 units. The budgeted September 30 raw materials inventory is 1,980 units. Raw materials cost $7.75 per unit. Each finished unit requires 0.50 units of raw materials. Company policy calls for a given month's ending raw materials inventory to equal 20% of the next month's materials requirements. 5. Each finished unit requires 0.50 hours of direct labor at a rate of $16 per hour. 6. Overhead is allocated based on units of production. The predetermined variable overhead rate is $1.35 per unit produced. Depreciation of $20,000 per month is treated as fixed factory overhead. 7. Monthly general and administrative expenses include $12,000 administrative salaries and 0.9% monthly interest on the long-term note payable. 8. Sales commissions are 12% of sales and are paid in the month of the sales. The sales manager's monthly salary is $3,750 per month. Specifically, the following critical elements must be addressed when creating an Operating Budget by completing the budget templates found on the "Budgets" tab below. Step 1: Prepare a Sales Budget Complete Part A - Sales Budget, on the budget tab below by using the information found in the budgeted balance sheet above. Consider assumption 1 while completing this critical element: Sales were 20,000 units in June 2015. Forecasted sales in units are as follows: July, 18,000; August, 22,000; September, 20,000; October, 24,000. The sales price per unit is $18.00 and the total product cost is $14.35 per unit. You can find an example of a sales budget in Exhibit 22-5 on page 1324. Step 2: Prepare a Production Budget Complete Part C - Production Budget on the budget tab below by using the information found in the budgeted balance sheet above. Consider assumption 1 while completing this critical element: Sales were 20,000 units in June 2015. Forecasted sales in units are as follows: July, 18,000; August, 22,000; September, 20,000; October, 24,000. The sales price per unit is $18.00 and the total product cost is $14.35 per unit. Consider assumption 2 while completing this critical element: The June 30 finished goods inventory is 16,800 units. Consider assumption 3 while completing this critical element: Company policy calls for a given month's ending finished goods inventory to equal 70% of the next month's expected unit sales. You can find an example of a production budget in Exhibit 22-6 on page 1325. Step 3: Prepare a Manufacturing Budget Complete Part E - Manufacturing Budget on the budget tab below by using the information found in the budgeted balance sheet above. The manufacturing budget consists of three parts, the Raw Materials Budget, the Direct Labor Budget, and the Factory Overhead Budget. Raw Material Budget Consider assumption 4 while completing this critical element: The June 30 raw materials inventory is 4,600 units. The budgeted September 30 raw materials inventory is 1,980 units. Raw materials cost $7.75 per unit. Each finished unit requires 0.50 units of raw materials. Company policy calls for a given month's ending raw materials inventory to equal 20% of the next month's materials requirements. Consider units to be produced found in the production budget while completing this critical element. Direct Labor Budget Consider assumption 5 while completing this critical element: Each finished unit requires 0.50 hours of direct labor at a rate of $16 per hour. Consider units to be produced found in the production budget while completing this critical element. Factory Overhead Budget Consider assumption 6 while completing this critical element: Overhead is allocated based on units of production. The predetermined variable overhead rate is $1.35 per unit produced. Depreciation of $20,000 per month is treated as fixed factory overhead. Consider units to be produced found in the production budget while completing this critical element. Step 4: Prepare a Selling Budget Complete Part G - Selling Expense Budget. Consider assumption 8 while completing this critical element: Sales commissions are 12% of sales and are paid in the month of the sales. The sales manager's monthly salary is $3,750 per month. Step 5: General and Administrative Expense Budget Complete Part I - General and Admin Expense Budget. Consider assumption 7 while completing this critical element: Monthly general and administrative expenses include $12,000 administrative salaries and 0.9% monthly interest on the long-term note payable. Specifically, the following critical elements must be addressed when performing the Budget Variance Analysis using the budget variance worksheet The actual quantity of material used was 31,000 with an actual cost of $7.75 per unit. The actual labor hours were 33,000 with an actual rate per hours of $15. Step 1: Complete A. Develop a variance analysis including a Budget Variance performance report and appropriate variances for materials, labor, and overhead. Start with the Labor and Materials variance tab. Standard costs/quantities come from raw materials budget and the labor budget. Use Exhibits 23-11 on page 1416 and 23-12 on page 1419 as guides. After completing the Labor and Materials variance tab, transfer variances to Budget Variance Report tab. Congratulations! You have completed the workbook portion of your Final Project Part I. To complete the discussion portion of Final Project Part I, complete the Final Project Part I Student Discussion document. ACC 202 - Peyton Approved Sales Budget Part A - Sales Budget Peyton Approved Sales Budgets July, August, and September 2015 Projected Months Budgeted Units Budgeted Unit Price Budgeted Total Dollars July-15 18000 $ 18.00 $ 324,000.00 August-15 22000 $ 18.00 $ 396,000.00 September-15 20000 $ 18.00 $ 360,000.00 Total for the first quarter 60000 $ 18.00 $ 1,080,000.00 Part B - Production Budget Peyton Approved Production Budget July, August, and September 2015 Jul. Next month's budgeted sales Aug. Sept. Total 22000 20000 24000 70% 70% 70% Budgeted ending inventory 15400 14000 Add budgeted sales 18000 Required units to be produced 46200 Next month's sales x % of inventory to future sales 22000 20000 60000 Also known as Budgeted Units from first chart. 36000 36800 106200 (15,400) (14,000) (46,200) 16600 Units to be produced 16800 (16,800) Deduct beginning inventory Sales from the next month. 33400 Percentage of inventory to future sales 66000 20600 22800 60000 Previous month's ending Inventory Part C- Manufacturing budget - contains raw materials budget, direct labor budget, and factory overhead budget Peyton Approved Raw Materials Budget July, August, and September 2015 Jul. Production budget (units) Aug. Sept. Total 16600 20600 22800 Materials requirement per unit 0.50 0.50 0.50 Materials needed for production 8300 10300 11400 Add budgeted ending inventory 60000 Total from Row 26 Half of production budget 30000 Materials Requirment % x Production Budget = Materials needed for Production (20% of next months required materials) 2060 12580 13380 36320 Materials needed for Production + Budgeted Ending Inventory (2,060) (2,280) (8,940) Previous month's ending Inventory 5760 Materials to be purchased 6320 (4,600) Deduct beginning inventory 1980 10360 Total materials requirements (units) 2280 10520 11100 27380 Total Material Requirments - Beginning Inventory (Production cost of each Item) Material price per unit $ 7.75 $ 7.75 $ 7.75 $ 7.75 Total cost of direct material purchases $ 44,640.00 $ 81,530.00 $ 86,025.00 $ 212,195.00 Materials to be Purchased x material price per unit Peyton Approved Direct Labor Budget July, August, and September 2015 Jul. Budgeted production (units) Aug. Sept. Total 16600 20600 22800 Labor requirements per unit (hours) 0.50 0.50 0.50 Total labor hours needed 8300 10300 60000 11400 Total from Row 26 Required hours of Direct Labor 30000 Labor rate (per hour) $ 16.00 $ 16.00 $ 16.00 Labor dollars $ 132,800.00 $ 164,800.00 $ 182,400.00 $ 16.00 $ Budgeted Production x Labor Requirments (What employees make per hour) 480,000.00 Total Labor hours needed x Labor Rate Peyton Approved Factory Overhead Budget July, August, and September 2015 Jul. Budgeted production (units) Aug. Sept. Total 16,600 20,600 22,800 ### $ 60,000 1.35 Total from Row 26 Predetermined variable overhead rate per unit Variable factory overhead rate $ 1.35 Budgeted variable overhead $ 22,410.00 $ 27,810.00 $ 30,780.00 $ 81,000.00 Budgeted production x Vaiable overhead rate Fixed overhead $ 20,000.00 $ 20,000.00 $ 20,000.00 $ 60,000.00 Depreciation Budgeted total overhead $ 42,410.00 $ 47,810.00 $ 50,780.00 $ 141,000.00 Budgeted variable overhead + Fixed overhead Part D - Selling Expense Budget Peyton Approved Selling Expense Budgets July, August, and September 2015 Jul. Budgeted sales $ Aug 324,000.00 Sales commission percent $ Sept. 396,000.00 12% $ Total 360,000.00 12% $ 1,080,000.00 Totals from Part A Column G Sales Rep. Commissions are 12% of the sales 12% Sales commissions expense $ 38,880.00 $ 47,520.00 $ 43,200.00 $ Sales salaries $ 3,750.00 $ 3,750.00 $ 3,750.00 $ 11,250.00 Total selling expenses $ 42,630.00 $ 51,270.00 $ 46,950.00 $ 140,850.00 129,600.00 Bugeted Sales x Sales Commission % Sales Manager's Monthly Salary Sales Commissions + Sales Salaries Part E - General and Admin Expense Budget Peyton Approved General and Administrative Expense Budgets July, August, and September 2015 Jul. Aug. Sept. Total Salaries $ 12,000.00 ### $ 12,000.00 $ 36,000.00 Interest on long-term note $ 2,700.00 ### $ 2,700.00 $ 8,100.00 Total expenses $ 14,700.00 14,700.00 $ 14,700.00 $ 44,100.00 $ General and Administrative Expenses (Monthly Interest .9%) $300,000 x 0.9% = $2,700 Salary + Interest Total