Marcus Company has the following budgeted variable costs per unit produced:

Direct materials $7.50

Direct labor 1.65

Supplies .24

Maintenance .18

Power .16

Budgeted fixed overhead costs per month include supervision of $88,000, depreciation of $75,000, and other overhead of $235,000.

Required: Prepare a flexible budget for all costs of production for the following level of production: 150,000 units, 160,000 units, and 170,000 units. For consistency, please use the Excel template provided.

Suppose that in April, Marcus Company produced 162,500 units and had the following actual costs:

Direct materials - $1,080,000

Direct labor - $257,300

Supplies - $36,350

Maintenance - $32,960

Power - $27,540

Supervision 89,500

Depreciation - $75,000

Other overhead - $232,000.

Required: Prepare a performance report for Marcus Company comparing actual costs with the flexible budget for actual units produced. Remember to identify each variable as either F (favorable) or U (unfavorable). In addition, discuss a possible reason that each of the variances exists (we dont have any information to KNOW the reason, so you are speculating here on POSSIBLE reasons). For consistency, please use the Excel template provided.

A1 f Flexible Budget: 1 Flexible Budget: 2 3 Variable costs: 4 Direct materials 5 Direct labor 6 Supplies 7 Maintenance 8 Power 9 Total variable costs 10 Fixed costs: 11 Supervision 12 Depreciation 13 Other fixed costs 14 Total fixed costs 15 Total overhead costs 16 17 Performance Report: 18 150,000 units 160,000 units 170,000 units Budget, 162,500 units Actual 162,500 units Variance ForU Possible Explanation 20 Direct materials 21 Direct labor 22 Supplies 23 Maintenance 24 Power 25 Total variable costs