The production supervisor of the Machining Department for Celtic Company agreed to the following monthly static budget for the upcoming year: Celtic Company Machining Department Monthly Production Budget Wages $290,000 Utilities 14,000 Depreciation 23,000 Total $327,000 The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows: Amount Units Spent Produced January $308,000 70,000 February 290,000 63,000 March 277,000 57,000 The Machining Department supervisor has been very pleased with this performance because actual expenditures for January-March have been less than the monthly static budget of $327,000. However, the plant manager believes that the budget should not remain fixed for every month but should "lex" 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 $19.00 Utility cost per direct labor hour $0.90 Direct labor hours per unit 0.20 Planned monthly unit production 76.000

The production supervisor of the Machining Department for Celtic Company agreed to the following monthly static budget for the upcoming year: Celtic Company Machining Department Monthly Production Budget Wages $290,000 Utilities 14,000 Depreciation 23,000 Total $327,000 The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows: Amount Units Spent Produced January $308,000 70,000 February 290,000 63,000 March 277,000 57,000 The Machining Department supervisor has been very pleased with this performance because actual expenditures for January-March have been less than the monthly static budget of $327,000. However, the plant manager believes that the budget should not remain fixed for every month but should "lex" 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 $19.00 Utility cost per direct labor hour $0.90 Direct labor hours per unit 0.20 Planned monthly unit production 76.000

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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