Question

Help 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.) Ray Company Production Department Flexible Budget Performance Report For the Month Ended August 31 Actual Flexible Results Spending Variances Budget Activity Variances Planning Budget Labor-hours (9) 9,610 9,130 Direct labor $ 199,145 $ 197,005 Indirect labor $ 2,662 F 20,043 Utilities $ 7,800 + $ 1,580 U 960 U S 26,060 $ $ Supplies 5,122 4,430 ( S | None 0 None Equipment depreciation 1981650 Factory administration / 18,960 + 1.20 ) Total expense S 361,120

Answer 1

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)	9610			9,610			9,130
Direct labor	( $21 q)	$         1,99,145	$ 2,140	U	$ 1,97,005	$   9,840	U	$1,87,165
Indirect labor	($7550 + 1.30 q)	$             17,381	$ 2,662	F	$     20,043	$      624	U	$    19,419
Utilities	($7800 + $2.00 q)	$             28,600	$ 1,580	U	$     27,020	$      960	U	$    26,060
Supplies	( $1691 + 0.30 q)	$               5,122	$     548	U	$       4,574	$      144	U	$      4,430
Equipment depreciation	($81650)	$             81,650	$        -	None	$     81,650	$          -	None	$    81,650
Factory administration	($18960 + 1.20q)	$             29,222	$ 1,270	F	$     30,492	$      576	U	$    29,916
Total expense		$         3,61,120	$     336	U	$ 3,60,784	$12,144	U	$3,48,640
Workings:
Direct labor	=	$197005 / 9610
		$                     21
Indirect labor
	( r + 1.30q) = $20043
	( r + 1.30 X 9610) = $20043
	r = $20043 - $12493
	r = $7550
Utilities
	($7800 + z q) = $27020
	($7800 + z * 9610) = $27020
	z = $2.00
Supplies
Let:	(x + yq) = 4574
	(x + yq) = 4430
also	(x + y * 9610) = 4574
or	(x + y* 9130) = 4430
	By computing above we get,
	x = $1691
	y = 0.30

A Е F G Н Production department flexible Budget performance report 2 For the month ended August 31 33 Spending Activity Flexible Budget Actual results Planning Budget 4. Variances Variance 5 Labor - hours (q) 9610 -C5 9130 6 ($21 q) ($7550 1.30 q) |($7800+$2.00 q) ($1691 0.30 q) 7 Direct labor -C27*15 199145 C7-F7 197005 F7-17 8 Indirect labor 2662 F8-18 (15*1.3)+7550 F8-D8 F 20043 9 Utilities D9+F9 1580 19+G9 960 26060 10 Supplies 11 Equipment depreciation ($81650) 12 Factory administration 13 Total expense -C10-F10 4574 F10-110 5122 U 4430 81650 0 None 81650 0 None 81650 (F5*1.2)+18960 F12-12 =SUM(F7:F12) ($18960+1.20q) (15*1.2)+18960 C13-C7-C8-C9-C10-C11 F12-C12 F =SUM(17:112) 361120 C13-F13 =F13-113 14 15 16 17 18 19 20 21 22 23 24 Sheet44 Sheet41 Sheet34 Sheet35 Sheet36 Sheet37 Sheet38 Sheet39 Sheet40 Sheet42 Sheet43 LO