abor per attaché case are$40, $8, and $13, respectively. The president is pleased with the following performance report:Actual output was 9,200 attaché cases. Assume all threedirect-cost items above are variable costs. Requirement Is the presiden

abor per attaché case are$40, $8, and $13, respectively. The president is pleased with the following performance report:Actual output was 9,200 attaché cases. Assume all threedirect-cost items above are variable costs. Requirement Is the presiden

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter7: The Master Budget And Flexible Budgeting

Section: Chapter Questions

Problem 7P: Preparing a performance report Use the flexible budget prepared in P7-6 for the 31,000-unit level...

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Question

Company's budgeted prices for direct materials, direct manufacturing labor, and direct marketing (distribution) labor per attaché case are$40, $8,
and $13, respectively. The president is pleased with the following performance report:Actual output was 9,200 attaché cases. Assume all threedirect-cost items above are variable costs.

Requirement

Is the president's pleasure justified? Prepare a revised performance report that uses a flexible budget and a static budget.

Data Table
Actual Costs
Static Budget
Variance
Direct materials
$
381,000 $
416,000
$35,000 F
Direct manufacturing labor
81,400
83,200
1,800 F
Direct marketing (distribution) labor
124,200
135,200
11,000 F
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