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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 2019 follow:
Static Budget | Actual Results | ||||||||
Production in units | 21,000 kits | 22,800 kits | |||||||
Direct materials | $ | 136,500 | $ | 185,200 | |||||
Direct labor | 115,500 | 118,200 | |||||||
Variable manufacturing overhead | 31,500 | 37,700 | |||||||
Total variable costs | 283,500 | 341,100 | |||||||
Fixed manufacturing overhead | 208,000 | 202,800 | |||||||
Total manufacturing cost | $ | 491,500 | $ | 543,900 | |||||
Required
a. Convert the static budget into a flexible budget.
b. Calculate the variances.
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Calculate the variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)
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