Question

Sunshine 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).)

Ray Company
Production Department Flexible Budget Performance Report
For the Month Ended August 31
						Actual Results	Spending Variances		Flexible Budget	Activity Variances		Planning Budget
Labor-hours (q)						9,550						9,070
Direct labor	(		q)			$169,205			$167,125
Indirect labor	(		+	$1.60	q)		1,474	F	22,770
Utilities	(		+		q)		1,520	U		672	U	19,898
Supplies	(		+		q)	5,038			4,514			4,370
Equipment depreciation	(	$80,150	)				0	None		0	None
Factory administration	(	$18,840	+	$1.60	q)
Total expense						$330,689

Required:

Complete the Production Department’s Flexible Budget Performance Report.

Answer 1

				Actual	Spending variance		Flexible	Activity variance		Planning
				results			budget			budget
labor hours				9,550			9,550			9,070
Direct labor			17.5	169,205	2,080	U	167,125	8,400	U	158725
Indirect labor		7,490	1.6	21,296	1,474	F	22,770	768	U	22002
Utilities		7,400	1.4	22,090	1,520	U	20,570	672	U	19,898
Supplies		1,649	0.3	5,038	524	U	4,514	144	U	4,370
Equipment depreciation		80,150		80,150	0	N	80,150	0	N	80,150
Factory administration		18,840	1.6	32,910	1,210	F	34120	768	U	33352
total expense				330,689	1,440	U	329,249	10,752	U	318497