Question

Acme Company’s production budget for August is 18,300 units and includes the following component unit costs: direct materials, $6.30; direct labor, $10.80; variable overhead, $6.50. Budgeted fixed overhead is $40,000. Actual production in August was 19,110 units. Actual unit component costs incurred during August include direct materials, $9.00; direct labor, $10.20; variable overhead, $7.60. Actual fixed overhead was $42,300.

Required:
Prepare a performance report, including each cost component. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

Acme Company's production budget for August is 18,300 units and includes the following component unit costs: direct materials, $6.30; direct labor, $10.80; variable overhead, $6.50. Budgeted fixed overhead is $40,000. Actual production in August was 19,110 units. Actual unit component costs incurred during August include direct materials, $9.00; direct labor, $10.20; variable overhead, $7.60. Actual fixed overhead was $42,300. Required: Prepare a performance report, including each cost component. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) Budget Variance Original Budget (18,300 units) Flexed Budget (19,110 units) Actual Cost (19,110 units) Cost Component Direct materials Direct labor Variable overhead Fixed overhead Total budgeted cost $ 0 $ 0 $ op

Answer 1

Answer-

ACME COMPANY
PERFORMANCE REPORT
COST	ORIGINAL COST (18300 units)	FLEXIBLE BUDGET (19110 units)	ACTUAL COST (19110 units)	BUDGET VARIANCE	REMARK
Direct material	18300 units*$6.30 per unit =$115290	19110 units*$6.30 per unit =$120393	19110 units*$9 per unit =$171990	-51597	Unfavorable
Direct labor	18300 units*$10.80 per unit =$197640	19110 units*$10.80 per unit =$206388	19110 units*$10.20 per unit =$194922	11466	Favorable
Variable overhead	18300 units*$6.50 per unit =$118950	19110 units*$6.50 per unit =$124215	19110 units*$7.60 per unit =$145236	-21021	Unfavorable
Fixed overhead	$40000	$40000	$42300	-2300	Unfavorable
Total budgeted cost	$471880	$490996	$554448	-63452	Unfavorable