Niland Company-Machining Department Flexible Production Budget For the Three Months Ending March 31 Units of production Wages Utilities Depreciation Total Feedback ►Check My Work b. Compare the flexible budget with the actual expenditures for the first three months. February Total flexible budget January February March Actual cost January $ $ Excess of actual cost over budget $ What does this comparison suggest? The Machining Department has performed better than originally thought. The department is spending more than would be expected. March No Yes
Niland Company-Machining Department Flexible Production Budget For the Three Months Ending March 31 Units of production Wages Utilities Depreciation Total Feedback ►Check My Work b. Compare the flexible budget with the actual expenditures for the first three months. February Total flexible budget January February March Actual cost January $ $ Excess of actual cost over budget $ What does this comparison suggest? The Machining Department has performed better than originally thought. The department is spending more than would be expected. March No Yes
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter9: Profit Planning And Flexible Budgets
Section: Chapter Questions
Problem 48BEB: Performance Report Based on Budgeted and Actual Levels of Production Balboa Company budgeted...
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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.
Question
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3.)
Transcribed Image Text:The production supervisor of the Machining Department for Niland Company agreed to the following monthly static budget for the upcoming year:
Niland Company
Machining Department
Monthly Production Budget
Wages
Utilities
Depreciation
Total
January
February
The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows:
Amount Spent Units Produced
March
$200,000
191,000
$180,000
182,000
12,000
20,000
$212,000
55,000
50,000
Wages per hour
Utility cost per direct labor hour
Direct labor hours per unit
Planned monthly unit production
45,000
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 $212,000. However, the plant manager believes that the budget should not remain fixed for every month but should "flex" or adjust to the volume of
work that is produced in the Machining Department. Additional budget information for the Machining Department is as follows:
$15.00
$1.00
0.20
60,000
a. Prepare a flexible budget for the actual units produced for January, February, and March in the Machining Department. Assume that depreciation is a fixed cost. Enter
all amounts as positive numbers. If required, use per unit amounts carried out to two decimal places.
Transcribed Image Text:Niland Company-Machining Department
Flexible Production Budget
For the Three Months Ending March 31
Units of production
Wages
Utilities
Depreciation
Total
Feedback
►Check My Work
b. Compare the flexible budget with the actual expenditures for the first three months.
February
Total flexible budget
January February March
Actual cost
January
$
Excess of actual cost over budget $
What does this comparison suggest?
The Machining Department has performed better than originally thought.
The department is spending more than would be expected.
March
No
Yes
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