Question

Ray Company provided the following excerpts from its Production Department's flexible budget performance report. (Round "rate per hour answers to 2 decimal places. Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (I.e., zero varlance). Input all amounts as positive values.) Required: Complete the Production Department's Flexible Budget Performance Report. Ray Company Production Department Flexible Budget Performance Report For the Month Ended August 31 Actual Flexible Results Spending Variances Budget 9.510 Activity Variances Planning Budget 9.030 Labor-hours (9) $ 150.445 $ 147,405 18,862 $ 1.20 g) Direct labor Indirect labor Utilities Supplies Equipment depreciation 2,938 F 1,480 U d $ 6,800 + 480U 15,830 4.330 a) 4.982 4,474 0 None 0 None 79.150) 18.700 + Factory administration $ 1.20) Total expense IS 297 293

Answer 1

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Ray Company
Production department flexible Budget performance report
For the month ended August 31
		Actual results	Spending Variances		Flexible Budget	Activity Variance		Planning Budget
Labor - hours	(q)	9510			9,510			9,030
Direct labor	( $16 q)	$         1,50,445	$    3,040	U	$ 1,47,405	$   7,440	U	$1,39,965
Indirect labor	($7450 + 1.20 q)	$             15,924	$    2,938	F	$     18,862	$      576	U	$    18,286
Utilities	($6800 + $1.00 q)	$             17,790	$    1,480	U	$     16,310	$      480	U	$    15,830
Supplies	( $1621 + $0.30 q)	$               4,982	$        508	U	$       4,474	$      144	U	$      4,330
Equipment depreciation	($79150)	$             79,150	$           -	None	$     79,150	$          -	None	$    79,150
Factory administration	($18760 + 1.20 q)	$             29,002	$    1,170	F	$     30,172	$      576	U	$    29,596
Total expense		$         2,97,293	$        920	U	$ 2,96,373	$   9,216	U	$2,87,157
Workings:
Direct labor	=	$147405 / 9510
		$                     16
Indirect labor
	( r + 1.20 q) = $18862
	( r + 1.20 X 9510) = $18862
	r = $18862 - $11412
	r = $7450
Utilities
	($6800 + z q) = $16310
	($6800 + z * 9510) = $16310
	z = $1
Supplies
Let:	(x + yq) = 4474
	(x + yq) = 4330
also	(x + y * 9510) = 4474
or	(x + y* 9030) = 4330
	By computing above we get,
	x = $1621
	y = 0.30

Formula Auditing Nm Activity Variance Planning Budget 9030 (9) Function Library Defined Names K19 - face A DE Ray Company Production department flexible Budget performance report For the month ended August 31 Spending Actual results Variances Flexible Budget 5 Labor - hours 9510 =C5 6 7 Direct labor ($169) 150445 =C7-F7 U 147405 8 Indirect labor ($7450 + 1.20 q) =F8-08 2938 F 18862 9 Utilities ($6800 + $1.00 q) =D9+F9 1480 U -19+G9 10 Supplies ($1621 + $0.30 g) 4982 =C10-F10 U 4474 11 Equipment depreciation ($79150) 79150 0 None 79150 12 Factory administration ($18760 + 1.209) =C13-C7-C8-C9-C10-C11 =F12-C12 F =(F5*1.2)+18760 13 Total expense 297293 =C13-F13 U =SUM(F7:F12) 14 15 Workings: 16 Direct labor $147405 / 9510 17 =F7/F5 18 19 Indirect labor 20 (r+1.20q) = $18862 (r+1.20 X 9510) = $18862 r = $18862 - $11412 r = $7450 =F7-17 =F8-18 480 0 =F10-110 V =C17*15 U =(15*1.2)+7450 15830 V 4330 None 79150 U =(15*1.2)+18760 U -SUM(17:112) =F12-112 =F13-113 21