Question

Google Show Me How Calculator Total O Static Budget versus Flexible Budget The production supervisor of the Machining Department for Niland Company agreed to the following monthly state budget for the upcoming year: Niland Company Machining Department Monthly Production Budget Wages $564,000 Utilities Depreciation $636,000 The actual amount spent and the actual units produced Department were as follows: Amount Spent Units Produced January $599,000 109,000 February 570,000 99,000 March 541,000 89,000 The Machining Department supervisor has been very pleased with this performance because actual expenditures for January-March have been significantly less than the monthly static budget of 636,000 However, the plant manager believes that the budget should not remain foxed for every month but should "flex or adjust to the volume of work that is produced in the Machining Department. Additional budget information for the Machining Department is as follows: Wages per hour $19 Utility cost per direct labor hour $0.9 Direct labor hours per unit Planned monthly unit production 118,000 a. Prepare a flexible budget for the actual units produced for January, February, and March in the Machining Department. Assume depreciation is a fixed cost. If required, use per unit amounts carried out to two decimal places. Check My Work Email Instructor Save and Exit Submit Assignment for Grading

Answer 1

			Jan	Feb	March
units of production			109,000	99,000	89,000
Wages			517750	470250	422750
Utilities			24525	22275	20025
Depreciation			45,000	45,000	45,000
total			587275	537525	487775
supporting calculations:
units of production			109,000	99,000	89,000
hours per unit			0.25	0.25	0.25
total hours of production			27250	24750	22250
Wages per hour			19	19	19
total wages			517750	470250	422750
total hours of production			27250	24750	22250
utility costs per hour			0.9	0.9	0.9
total utility			24525	22275	20025
b)			January	Feburary	March
Total Flexible Budget			587275	537525	487775
Actual cost			599,000	570,000	541,000
Excess of actual cost over budget			11,725	32,475	53,225
performed better than orginally thought					NO
Department is spending more					YES