Question

Performance Report Based on Actual Production

Palladium Inc. produces a variety of household cleaning products. Palladium's controller has developed standard costs for the following four overhead items:

Overhead Item	Total Fixed Cost	Variable Rate per Direct Labor Hour
Maintenance	$ 86,000	$0.20
Power		0.45
Indirect labor	140,000	2.10
Rent	35,000

Next year, Palladium expects production to require 90,000 direct labor hours.

Assume that actual production required 98,000 direct labor hours at standard. The actual overhead costs incurred were as follows:

Maintenance	$90,000		Indirect labor	$336,000
Power	41,200		Rent	35,000

X

Performance Report

Prepare a performance report for the period based on actual production. In the variance type column, select "F" for favorable and "U" for unfavorable. If the variance is zero, enter ("0") in the variance amount column and "N" for neither in the variance type column. Enter negative values for negative numbers.

Palladium Inc.
Performance Report
	Actual	Budgeted	Variance	Variance Type (F or U or N)
Direct labor hours based on actual
Variable overhead:
Maintenance	$	$	$
Power
Indirect labor
Rent
Total overhead	$	$	$

Answer 1

Performance Report

Prepare a performance report for the period based on actual production. In the variance type column, select "F" for favorable and "U" for unfavorable. If the variance is zero, enter ("0") in the variance amount column and "N" for neither in the variance type column. Enter negative values for negative numbers.

Palladium Inc.
Performance Report
	Actual	Budgeted	Variance	Variance Type (F or U or N)
Direct labor hours based on actual	98000	98000
Variable overhead:
Maintenance	90000	$105600	-$15600	F
Power	41200	44100	-2900	F
Indirect labor	336000	345800	-9800	F
Rent	35000	35000	0	None
Total overhead	$502200	$530500	$28300	F