Flexible Budget for Varying Levels of Activity Nashler Company has the following budgeted variable costs per unit produced: Direct materials $7.20 Direct labor 1.54 Variable overhead: Supplies 0.23 Maintenance 0.19 Power 0.18 Budgeted fixed overhead costs per month include supervision of $98,000, depreciation of $76,000, and other overhead of $245,000. In March, Nashler Company produced 163,200 units and had the following actual costs: Direct materials $1,170,000 Direct labor 258,000 Supplies 38,100 Maintenance 30,960 Power 29,300 Supervision 99,450 Depreciation 76,000 Other overhead 244,300 Required: Question Content Area 1. Prepare a performance report for Nashler Company comparing actual costs with the flexible budget for actual units produced. If there is no variance, enter "0" for the amount and select "NA" in the last column.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Flexible Budget for Varying Levels of Activity
Nashler Company has the following budgeted variable costs per unit produced:
| Direct materials | $7.20 |
| Direct labor | 1.54 |
| Variable |
|
| Supplies | 0.23 |
| Maintenance | 0.19 |
| Power | 0.18 |
Budgeted fixed overhead costs per month include supervision of $98,000,
In March, Nashler Company produced 163,200 units and had the following actual costs:
| Direct materials | $1,170,000 |
| Direct labor | 258,000 |
| Supplies | 38,100 |
| Maintenance | 30,960 |
| Power | 29,300 |
| Supervision | 99,450 |
| Depreciation | 76,000 |
| Other overhead | 244,300 |
Required:
Question Content Area
1. Prepare a performance report for Nashler Company comparing actual costs with the flexible budget for actual units produced. If there is no variance, enter "0" for the amount and select "NA" in the last column.
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