Question

department's static budget and actual results for 2019 follow: Production in units Direct materials Direct labor Variable manufacturing overhead Total variable costs Fixed manufacturing overhead Total manufacturing cost Static Budget 30,000 kits $ 234,000 204,000 45,000 483,000 214,000 $697,000 Actual Results 31,600 kits $ 283,880 208,580 51,100 543,560 209,800 $ 753,360 Required a. Convert the static budget into a flexible budget. b. Calculate the variances. Complete this question by entering your answers in the tabs below. Required A Required B Convert the static budget into a flexible budget. (Do not round intermediate calculations.) Flexible Budget 31,600 Kits Production in units Direct materials Direct labor Variable manufacturing overhead Total variable costs Fixed manufacturing overhead

Answer 1

	Flexible Budget
Production in units	31,600
Direct materials	$ 2,46,480
Direct labor	$ 2,14,880
Variable Manufacturing overheads	$     47,400
Total Variable costs	$ 5,08,760
Fixed Manufacturing overheads	$ 2,14,000
Total Manufacturing overheads	$ 7,22,760
	Variance
Direct materials	$     37,400	U
Direct labor	$       6,300	F
Variable Manufacturing overheads	$       3,700	U
Total Variable costs	$     34,800	U
Fixed Manufacturing overheads	$       4,200	F
Total Manufacturing overheads	$     30,600	U
Workings:
	Budget amount per unit	Master Budget	Flexible Budget	Actual results	Variance
Production in units	(q)	30,000	31,600	31,600
Direct materials	$         7.80	$   2,34,000	$   2,46,480	$   2,83,880	$       37,400	U
Direct labor	$         6.80	$   2,04,000	$   2,14,880	$   2,08,580	$         6,300	F
Variable Manufacturing overheads	$         1.50	$       45,000	$      47,400	$      51,100	$         3,700	U
Total Variable costs		$   4,83,000	$   5,08,760	$   5,43,560	$       34,800	U
Fixed Manufacturing overheads		$   2,14,000	$   2,14,000	$   2,09,800	$         4,200	F
Total Manufacturing overheads		$   6,97,000	$   7,22,760	$   7,53,360	$       30,600	U