Following is a partially completed performance report for a recent week for direct labor in the binding department of a book publisher: Original Budget Flexed Budget $ 16,530 Direct labor The original budget is based on the expectation that 9,120 books would be bound; the standard is 16 books per hour at a pay rate of $29 per hour. During the week, 10,080 books were actually bound. Employees worked 580 hours at an actual total cost of $17,400. Actual $ 17,400 Required: a. Calculate the flexed budget amount against which actual performance should be evaluated and then calculate the budget variance. b. Calculate the direct labor efficiency variance in terms of hours. c. Calculate the direct labor rate variance. Note: Do not round intermediate calculations. a. Flexed budget a. Budget variance b. Direct labor efficiency variance c. Direct labor rate variance Budget Variance Note: For all requirements, indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). F hours U F
Following is a partially completed performance report for a recent week for direct labor in the binding department of a book publisher: Original Budget Flexed Budget $ 16,530 Direct labor The original budget is based on the expectation that 9,120 books would be bound; the standard is 16 books per hour at a pay rate of $29 per hour. During the week, 10,080 books were actually bound. Employees worked 580 hours at an actual total cost of $17,400. Actual $ 17,400 Required: a. Calculate the flexed budget amount against which actual performance should be evaluated and then calculate the budget variance. b. Calculate the direct labor efficiency variance in terms of hours. c. Calculate the direct labor rate variance. Note: Do not round intermediate calculations. a. Flexed budget a. Budget variance b. Direct labor efficiency variance c. Direct labor rate variance Budget Variance Note: For all requirements, indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). F hours U F
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
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.
Topic Video
Question
Q. 7
Transcribed Image Text:Exercise 15-11 (Algo) Performance reporting and flexible budgeting LO 15-4, 15-5
Following is a partially completed performance report for a recent week for direct labor in the binding department of a book publisher:
Original Budget Flexed Budget
$ 16,530
Budget Variance
Direct labor
The original budget is based on the expectation that 9,120 books would be bound; the standard is 16 books per hour at a pay rate of
$29 per hour. During the week, 10,080 books were actually bound. Employees worked 580 hours at an actual total cost of $17,400.
Required:
a. Calculate the flexed budget amount against which actual performance should be evaluated and then calculate the budget variance.
b. Calculate the direct labor efficiency variance in terms of hours.
c. Calculate the direct labor rate variance.
Note: Do not round intermediate calculations.
Note: For all requirements, indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for
no effect (i.e., zero variance).
a. Flexed budget
a. Budget variance
b. Direct labor efficiency variance
c. Direct labor rate variance
Actual
$ 17,400
[F
hours
บ
F
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education