7.17 Flexible budget. At Connor, the budgeted price of direct raw materials, direct production labor and direct marketing (distribution) work is $40, $8 and $12 per briefcase, respectively. The President is pleased with the data in the following performance report: Actual costs $ 364.000 Static budget $ 400.000 Deviation Direct raw materials Direct production work Direct marketing (distribution) work $ 36.000 F 2.000 F 10.000 F 78.000 80.000 110.000 120.000 Request Actual production was 8,800 briefcases. Is the President's satisfaction justified? Develop a revised performance report using a flexible budget and a static budget. Assume that all of the above direct costs are variable costs.
7.17 Flexible budget. At Connor, the budgeted price of direct raw materials, direct production labor and direct marketing (distribution) work is $40, $8 and $12 per briefcase, respectively. The President is pleased with the data in the following performance report: Actual costs $ 364.000 Static budget $ 400.000 Deviation Direct raw materials Direct production work Direct marketing (distribution) work $ 36.000 F 2.000 F 10.000 F 78.000 80.000 110.000 120.000 Request Actual production was 8,800 briefcases. Is the President's satisfaction justified? Develop a revised performance report using a flexible budget and a static budget. Assume that all of the above direct costs are variable costs.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:7.17 Flexible budget. At Connor, the budgeted price of direct raw materials, direct production labor and direct marketing (distribution) work is
$40, $8 and $12 per briefcase, respectively. The President is pleased with the data in the following performance report:
Static budget
$ 400.000
Actual costs
Deviation
Direct raw materials
Direct production work
Direct marketing (distribution) work
$ 364.000
$ 36.000 F
78.000
80.000
2.000 F
110.000
120.000
10.000 F
Request
Actual production was 8,800 briefcases. Is the President's satisfaction justified? Develop a revised performance report using a flexible budget
and a static budget. Assume that all of the above direct costs are variable costs.
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