**Flexible Budget Analysis for Bryant Company**In this analysis, we examine Bryant Company’s budgeted costs compared to actual expenses for direct materials, direct manufacturing labor, and direct marketing (distribution) labor. The costs per attaché case are $43, $6, and $13, respectively. The following table highlights the performance report that has pleased the company president:| Cost Type | Actual Costs | Static Budget | Variance ||----------------------------------------|--------------|---------------|------------|| Direct materials | $438,000 | $473,000 | $35,000 F || Direct manufacturing labor | $63,600 | $66,000 | $2,400 F || Direct marketing (distribution) labor | $133,500 | $143,000 | $9,500 F |**Notes:**- **Actual output** was 10,000 attaché cases.- All cost items are assumed to be variable.**Analysis:**- "F" denotes a favorable variance, indicating the actual costs were lower than the budgeted amounts.- The company achieved cost savings across all categories, resulting in a favorable outcome overall.**Task:**Review whether the president's satisfaction is justified by preparing a revised performance report using a flexible budget instead of a static one.

All the variance which are shown above is unfavorable as the actual cost is higher than the flexible…

7-22 Flexible budget. Bryant Company's budgeted prices for direct materials, direct manufacturing la- bor, and direct marketing (distribution) labor per attaché case are $43, $6, and $13, respectively. The presi- dent is pleased with the following performance report: Actual Costs Static Budget Variance Direct materials $438,000 $473,000 $35,000 F Direct manufacturing labor Direct marketing (distribution) labor 63,600 133,500 66,000 2,400 F 143,000 9,500 F Actual output was 10,000 attaché cases. Assume all three direct-cost items shown are variable costs. Is the president's pleasure justified? Prepare a revised performance report that uses a flexible budget and a static budget.

7-22 Flexible budget. Bryant Company's budgeted prices for direct materials, direct manufacturing la- bor, and direct marketing (distribution) labor per attaché case are $43, $6, and $13, respectively. The presi- dent is pleased with the following performance report: Actual Costs Static Budget Variance Direct materials $438,000 $473,000 $35,000 F Direct manufacturing labor Direct marketing (distribution) labor 63,600 133,500 66,000 2,400 F 143,000 9,500 F Actual output was 10,000 attaché cases. Assume all three direct-cost items shown are variable costs. Is the president's pleasure justified? Prepare a revised performance report that uses a flexible budget and a static budget.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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