Acme Company's production budget for August is 18,000 units and includes the following component unit costs: direct materials, $8.00; direct labor, $10.50; variable overhead, $6.40. Budgeted fixed overhead is $37,000. Actual production in August was 19,950 units. Actual unit component costs incurred during August include direct materials, $8.70; direct labor, $9.90; variable overhead, $7.30. Actual fixed overhead was $39,000. Required: Prepare a performance report, including each cost component. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e zero variance). Cost Component Direct materials Direct labor Variable overhead Fixed overhead Total budgeted cost Original Budget (18,000 units) $ $ 8 11 6 Flexed Budget (19,950 units) 37,000 37,025 $ Actual Cost (19,950 units) 0 $ 0 Budget Variance
Acme Company's production budget for August is 18,000 units and includes the following component unit costs: direct materials, $8.00; direct labor, $10.50; variable overhead, $6.40. Budgeted fixed overhead is $37,000. Actual production in August was 19,950 units. Actual unit component costs incurred during August include direct materials, $8.70; direct labor, $9.90; variable overhead, $7.30. Actual fixed overhead was $39,000. Required: Prepare a performance report, including each cost component. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e zero variance). Cost Component Direct materials Direct labor Variable overhead Fixed overhead Total budgeted cost Original Budget (18,000 units) $ $ 8 11 6 Flexed Budget (19,950 units) 37,000 37,025 $ Actual Cost (19,950 units) 0 $ 0 Budget Variance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:Acme Company's production budget for
August is 18,000 units and includes the
following component unit costs: direct
materials, $8.00; direct labor, $10.50;
variable overhead, $6.40. Budgeted fixed
overhead is $37,000. Actual production in
August was 19,950 units. Actual unit
component costs incurred during August
include direct materials, $8.70; direct labor,
$9.90; variable overhead, $7.30. Actual
fixed overhead was $39,000.
Required:
Prepare a performance report, including
each cost component.
Note: Indicate the effect of each variance
by selecting "F" for favorable, "U" for
unfavorable, and "None" for no effect (i.e.,
zero variance).
Cost Component
Direct materials
Direct labor
Variable overhead
Fixed overhead
Total budgeted cost
Original Budget
(18,000 units)
$
$
8
11
6
Flexed Budget Actual Cost
(19,950 units) (19,950 units)
37,000
37,025 $
0 $
0
Budget Variance
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