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Rooney Medical Equipment Company makes a blood pressure measuring kit. Jason McCoy is the production manager. The production departments static budget and actual results for
Rooney Medical Equipment Company makes a blood pressure measuring kit. Jason McCoy is the production manager. The production departments static budget and actual results for Year 3 follow:
Static Budget Actual ResultsProduction in units30,000 kits 31,100 kitsDirect materials $213,000 $258,510 Direct labor 183,000 183,510 Variable manufacturing overhead 45,000 48,550 Total variable costs 441,000 490,570 Fixed manufacturing overhead 200,000 195,800 Total manufacturing cost $641,000 $686,370
Required
a. Convert the static budget into a flexible budget.
b. Calculate the variances.
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