Question
Question is in bold at the end of my worksheet For the month of: November Budget Data Fixed Variable Actual Portion Portion* Data Depreciation $4,000
Question is in bold at the end of my worksheet
| For the month of: | November | |||
| Budget Data | ||||
| Fixed | Variable | Actual | ||
| Portion | Portion* | Data | ||
| Depreciation | $4,000 | -- | $4,000 | |
| Maintenance | $1,800 | $0.70 | 4,730 | |
| Inspections | $2,800 | 0.25 | 3,702 | |
| Utilities | $4,000 | 0.20 | 4,900 | |
| Indirect material | 0.25 | 1,125 | ||
| Overtime | 2.25 | ** | 260 | |
| *per direct labor hour | ||||
| **per monthly direct labor hours in excess of | 4,000 | |||
| Planned direct labor hours for the month | 4,500 | |||
| Actual direct labor hours for the month | 4,100 | |||
| Static Budget | Budget | Actual | Difference | |
| Depreciation | $4,000 | $4,000 | $0 | |
| Maintenance | 4,950 | 4,730 | 220 | |
| Inspections | 3,925 | 3,702 | 223 | |
| Utilities | 4,900 | 4,900 | 0 | |
| Indirect material | 1,125 | 1,125 | 0 | |
| Overtime | 1,125 | 260 | 865 | |
| $20,025 | $18,717 | $1,308 | ||
| Flexible Budget | Budget | Actual | Difference | |
| Depreciation | $4,000 | $4,000 | $0 | |
| Maintenance | 4,670 | 4,730 | (60) | |
| Inspections | 3,825 | 3,702 | 123 | |
| Utilities | 4,820 | 4,900 | (80) | |
| Indirect material | 1,025 | 1,125 | (100) | |
| Overtime | 225 | 260 | (35) | |
| $18,565 | $18,717 | ($152) | ||
- The following actual overhead costs were incurred in December:
| Depreciation | $4,000 |
| Maintenance | $5,150 |
| Inspections | $3,790 |
| Utilities | $4,900 |
| Indirect material | $1,350 |
| Overtime | $1,125 |
1. Planned direct labor hours were 4,000. Actual direct labor hours were 4,500. Other budget data for December were identical to November except that fixed maintenance costs have increased to $2,000 and variable indirect materials costs have increased to $0.30 per direct labor hour.
a. Prepare and print new budget reports for December. Remember to change the month in cell B7. Save your file as FLEXBUD4. Compare the two budget reports and comment on the differences disclosed between the static budget and flexible budget performance reports.
b. If you were to suggest a revision to the budget for December, which cost category seems most in need of revision? Assuming that the fixed cost component of this budgeted cost is already correct, what should the variable cost component be so that the budget equals actual? Try difference values in the appropriate cell in the Data Section and write your answer below
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Pioneers Of Critical Accounting A Celebration Of The Life Of Tony Lowe
Authors: Jim Haslam, Prem Sikka
1st Edition
113754211X, 9781137542113
