Performance Report Based on Budgeted and Actual Levelsof ProductionBowling Company budgeted the following amounts:Variable costs of production:Direct materials 3 pounds @ $0.60 per poundDirect labor 0.5 hr. @ $16.00 per hourVOH 0.5 hr. @ $2.20FOH:Materials handling $6,200Depreciation $2,600 At the end of the year, Bowling had the following actual costs for production of 3,800 units:Direct materials $ 6,800Direct labor 30,500VOH 4,200FOH:Materials handling 6,300Depreciation 2,600Required:1. Calculate the budgeted amounts for each cost category listed above for the 4,000budgeted units.2. Prepare a performance report using a budget based on expected production of 4,000units.3. Prepare a performance report using a budget based on the actual level of production of3,800 units.
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.
Performance Report Based on Budgeted and Actual Levels
of Production
Bowling Company budgeted the following amounts:
Variable costs of production:
Direct materials 3 pounds @ $0.60 per pound
Direct labor 0.5 hr. @ $16.00 per hour
VOH 0.5 hr. @ $2.20
FOH:
Materials handling $6,200
At the end of the year, Bowling had the following actual costs for production of 3,800 units:
Direct materials $ 6,800
Direct labor 30,500
VOH 4,200
FOH:
Materials handling 6,300
Depreciation 2,600
Required:
1. Calculate the budgeted amounts for each cost category listed above for the 4,000
budgeted units.
2. Prepare a performance report using a budget based on expected production of 4,000
units.
3. Prepare a performance report using a budget based on the actual level of production of
3,800 units.
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