Question

Problem 14-3A (Part Level Submission) Sarasota Conmpany uses budgets in controlling costs. The August 20117 budget report for the company's Assembling Department is as follows. SARASOTA COMPANY Budget Report Assembling Department For the Month Ended August 31, 2017 Difference Favorable Unfavorable Manufacturing Costs Budget Actual Variable costs Direct materials $53,680 $52,580 1,100 Favorable 59,780 3,300 Favorable Direct labar 56,480 Indirect materials 29,280 29,380 100 Unfavorable Indirrct labor 19,520 19,060 4G0 Favorable Utilities 15,250 15,140 110 Favorable 12,200 12,530 330 Unfavorable Maintenance 189,710 185,170 4,510 Favprable Tatal variable Fixed costs 11,700 11,700 Rent -0- Supervision 18,500 18,500 -D- 7,300 -0 7,300 Depreciation 37,500 37,500 -0- Tatal fixed $4,540 Favorable $227,210 $222,670 Total costs The monthly budget amounts in the report were based on an expected production of 61,000 units per month or 732,000 units per year. The Assembling Department 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 for August because only 59,000 units were produced. *(a) Your answer is correct State the total monthly budgeted cost formula. (Round cost per unit to 2 decimal places, e.g. 1.25.) The formula is $57500 variable costs of $5.11 per unit. Attempts: 1 of 10 used

Answer 1

(c)

SARASOTA COMPANY
Assembling Department
Flexible Budget Report
For the Month Ended August 31, 2017
			Difference
	Budget	Actual Costs		Favorable Unfavorable Neither Favorable nor Unfavorable
Units	65000	65000
Variable Costs
Direct materials	57200	57838	638	Unfavorable
Direct labor	63700	62128	1572	Favorable
Indirect materials	31200	32318	1118	Unfavorable
Indirect labor	20800	20966	166	Unfavorable
Utilities	16250	16654	404	Unfavorable
Maintenance	13000	13783	783	Unfavorable
Total Variable Costs	202150	203687	1537	Unfavorable
Fixed Costs
Rent	11700	11700	0	Neither Favorable nor Unfavorable
Supervision	18500	18500	0	Neither Favorable nor Unfavorable
Depreciation	7300	7300	0	Neither Favorable nor Unfavorable
Total Fixed Costs	37500	37500	0	Neither Favorable nor Unfavorable
Total Costs	239650	241187	1537	Unfavorable

Working:

	Budget	Actual Costs
Units	65000	65000
Variable Costs
Direct materials	=51920*65/59	=52580*1.1
Direct labor	=57820*65/59	=56480*1.1
Indirect materials	=28320*65/59	=29380*1.1
Indirect labor	=18880*65/59	=19060*1.1
Utilities	=14750*65/59	=15140*1.1
Maintenance	=11800*65/59	=12530*1.1