Performance Report Based on Actual Production

Ladan Suriman, controller for Healthy Pet Company, has been instructed to develop a flexible budget for overhead costs. The company produces two types of dog food. BasicDiet is a standard mixture for healthy dogs. SpecialDiet is a reduced protein formulation for older dogs with health problems. The two dog foods use common raw materials in different proportions. The company expects to produce $80,000$ bags of each product during the coming year. BasicDiet requires $0\mathrm{.}20$ direct labor hour per bag, and SpecialDiet requires $0\mathrm{.}30$ direct labor hour per bag. Ladan has developed the following fixed and variable costs for each of the four overhead items:

Variable Rate per Direct

Assume that Healthy Pet actually produced $100,000$ bags of BasicDiet and $90,000$ bags of SpecialDiet. The actual overhead costs incurred were as follows:

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