Performance Report Based on Budgeted and Actual Levels of Production

Bowling Company budgeted the following amounts:

Variable costs of production:
Direct materials	3 pounds @ $0.60 per pound
Direct labor	0.5 hr. @ $16.00 per hour
VOH	0.5 hr. @ $2.20
FOH:
Materials handling	$6,200
Depreciation	$2,600

At the end of the year, Bowling had the following actual costs for production of 3,800 units:

Direct materials	$6,800
Direct labor	30,500
VOH	4,200
FOH:
Materials handling	6,300
Depreciation	$2,600

Required:

1. Calculate the budgeted amounts for each cost category listed above for the 4,000 budgeted units. $

Feedback

Calculate the total budget based on 4,000 units.

Fill in the budget using the different levels of activity noted at the top of each column.

Direct materials = Units x Materials per unit

Direct labor = Units x Direct Labor per unit

Variable Overhead = Units x Variable Overhead per unit

Fixed Overhead does not change with the number of units.

Review the "How to Prepare a Before-the-Fact Flexible Budget" example in the text.

2. Prepare a performance report using a budget based on expected production of 4,000 units. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number and if there is no entries enter "0" then select for "Not applicable".

Bowling Company
Performance Report
	Actual	Budgeted	Variance
Units produced				Unfavorable
Direct materials	$	$	$	Favorable
Direct labor				Favorable
Variable overhead				Favorable
Fixed overhead:
Materials handling				Unfavorable
Depreciation				Not applicable
Total	$	$	$	Favorable

Feedback

Fill in the report with the actual amounts provided and the budgeted amounts from Requirement 1. Note the instructions for how to enter the variances.

3. Prepare a performance report using a budget based on the actual level of production of 3,800 units. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number and if there is no entries enter "0" then select for "Not applicable".

Bowling Company
Performance Report
	Actual	Budgeted	Variance
Units produced				Not applicable
Direct materials	$	$	$	Favorable
Direct labor				Unfavorable
Variable overhead				Unfavorable
Fixed overhead:
Materials handling				Unfavorable
Depreciation				Not applicable
Total	$	$	$	Unfavorable