Question

CALCULATOR PRINTER VERSI Problem 10-3A a, b1, c (Part Level Submission) (Video) Ratchet Company uses budgets in controlling costs. The August 2020 budget report for the company's Assembling Department is as follows. RATCHET COMPANY Budget Report Assembling Department For the Month Ended August 31, 2020 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Manufacturing Costs Budget Actual Variable costs Direct materials $50,740 $49,740 $1,000 Favorable Direct labor 54,280 51,480 2,800 Favorable Indirect materials 25,960 26,260 300 Unfavorable Indirect labor 22,420 21,940 480 Favorable Utilities 14,750 14,580 170 Favorable 220 Unfavorable Maintenance 5,900 6,120 174,050 170,120 3,930 Favorable Total variable Fixed costs 0- Neither Favorable nor Unfavorable Rent 10,000 10,000 18,200 0- Neither Favorable nor Unfavorable Supervision 18,200 5,200 5,200 0- Neither Favorable nor Unfavorable Depreciation 0- Neither Favorable nor Unfavorable 33,400 33,400 Total fixed $207,450 $203,520 $3,930 Favorable Total costs The monthly budget amounts in the report were based on an expected production of 59,000 units per month or 708,000 units per year. The Assembling Da manager is pleased with the report and expects a raise, or at least praise for a job well done. The company president, however, is unhappy with the results because only 57,000 units were produced.

Answer 1

Solution:

Ratchet Company
Assembling Department
Flexible Budget Report
For the month ended September 30, 2020
Particulars	Budget	Actual Cost	Variance	Favorable / Unfavorable / Neither favorable nor unfavorable
Units	63000	63000
Variable costs:
Direct materials	$54,180.00	$54,714.00	$534.00	Unfavorable
Direct labor	$57,960.00	$56,628.00	$1,332.00	Favorable
Indirect materials	$27,720.00	$28,886.00	$1,166.00	Unfavorable
Indirect labor	$23,940.00	$24,134.00	$194.00	Unfavorable
Utilities	$15,750.00	$16,038.00	$288.00	Unfavorable
Maintenance	$6,300.00	$6,732.00	$432.00	Unfavorable
Total Variable Costs	$185,850.00	$187,132.00	$1,282.00	Unfavorable
Fixed Costs:
Rent	$10,000.00	$10,000.00	$0.00	Neither Favorable nor Unfavorable
Supervision	$18,200.00	$18,200.00	$0.00	Neither Favorable nor Unfavorable
Depreciation	$5,200.00	$5,200.00	$0.00	Neither Favorable nor Unfavorable
Total Fixed Costs	$33,400.00	$33,400.00	$0.00	Neither Favorable nor Unfavorable
Total Costs	$219,250.00	$220,532.00	$1,282.00	Unfavorable