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 variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). 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 Spending Variances Results Budget 9,540 Activity Variances Planning Budget 9,060 Labor-hours (9) :9) $ 164,250 $ 162,180 21,790 $ 1.50 a) + + 1,840 F 1,510 U $ 7,100 DITU 624 U 18,878 4,360 Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory administration Total expense a) 5,024 4,504 79,900 0 None 0 None ($18.820 + $ 1.50 g) $ 322,066

Answer 1

Ray company Production Depart Flexible Budget Performance Report For the Month Ended August 31 Actual Spending Flexible Results Variances Budget 9,540 9,540 Activity Variances Planning Budget 9,060 Labor-hours (9) Direct labor ($17* ) Indirect labor (57.480 + $1.50g) Utilities | ($7,100 +$1.30g) Supplies ($1,642 + $0.30g) | Equipment depreciation ($79,900) Factory administration ($18,820 + $1.50g) Total expense s164.250 $19.950 $21,012 $5,024 $79,900 $31,930 $322,066 $2,070 U | $162.180 $8,160 U | $154,020 $1.840 F $21.790 $720 U $21,070 $1,510U | $19,502 $624 U | $18,878 $520 U $4,504 $144 U $4,360 $0 None $79,900 $0 None $79.900 $1.200 F $33.130 $720 U $32.410 $1,060 U $321,006 $10,368 U . $310,638 Workings: Direct labor cost per hour : = $162.180 / 9,540 = $17 Fixed portion of Indirect labor : = $21,790 - ($9,540 * $1.50) = $21.790 - $14,310 = $7,480 Variable portion of Utilities : = $18.878 - $7.100 = $11,778 = $11.778 / 9,060 $1.30 Variable portion of Supplies : = $144 / (9,540 - 9,060) = $144 / 480 = $0.30 Fixed portion of Supplies : = $4,504 - ($9.540 * $0.30) = $4,504 - $2.862 = $1,642