Question
Walton Medical Equipment Company makes a blood pressure measuring kit. Jason McCoy is the production manager. The production departments static budget and actual results for
Walton 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 | 34,000 kits | 35,600 kits | |||||||
| Direct materials | $ | 241,400 | $ | 291,460 | |||||
| Direct labor | 207,400 | 209,860 | |||||||
| Variable manufacturing overhead | 51,000 | 56,000 | |||||||
| Total variable costs | 499,800 | 557,320 | |||||||
| Fixed manufacturing overhead | 215,000 | 210,400 | |||||||
| Total manufacturing cost | $ | 714,800 | $ | 767,720 | |||||
Required
a. Convert the static budget into a flexible budget.
b. Calculate the variances.
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Auditing The ISM
Authors: Mr. Ajoy Chatterjee
3rd Edition
8190233041, 978-8190233040
