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president, however, is unhappy with the results for August because only 59,000 units were produced. (a) State the total monthly budgeted cost formula. (Round cost per unit to 2 decimal places, e.g. 1.25.) The formula is $ + variable costs of $ per unit. (b) Prepare a budget report for August using flexible budget data. (List variable costs before fixed costs.) RATCHET COMPANY Assembling Department Flexible Budget Report For the Month Ended August 31, 2020

president, however, is unhappy with the results for August because only 59,000 units were produced. (a) State the total monthly budgeted cost formula. (Round cost per unit to 2 decimal places, e.g. 1.25.) The formula is $ + variable costs of $ per unit. (b) Prepare a budget report for August using flexible budget data. (List variable costs before fixed costs.) RATCHET COMPANY Assembling Department Flexible Budget Report For the Month Ended August 31, 2020

Managerial Accounting: The Cornerstone of Business Decision-Making
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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Ratchet Company uses budgets in controlling costs. The August 2020 budget report for the company's Assembling Department is as follows. RATCHET COMPANY Budget Report Assembling Department For the Month Ended August 31, 2020 Difference Manufacturing Costs Budget Actual Favorable Unfavorable Neither Favorable nor Unfavorable Variable costs Direct materials $51, 240 $50, 240 $1,000 Favorable Direct labor 56, 120 52, 920 3,200 Favorable Indirect materials 25, 620 25,920 300 Unfavorable Indirect labor 21,960 21, 560 400 Favorable Utilities 21,350 21, 180 170 Favorable Maintenance 7,320 7,760 440 Unfavorable Total variable 183,610 179, 580 4,030 Favorable Fixed costs Rent 10,600 10,600-0- Neither Favorable nor Unfavorable Supervision 18, 500 18,500 -0- Neither Favorable nor Unfavorable Depreciation 6, 900 6,900 -0- Neither Favorable nor Unfavorable Total fixed 36,000 36,000-0- Neither Favorable nor Unfavorable Total costs $219,610 $215, 580 $4,030 Favorable The monthly budget amounts in the report were based on an expected production of 61,000 units per month or 732, 000 units per year. The Assembling Department manager is pleased with the report and expects a raise, or at least praise for a job well done. The company president, however, is unhappy with the results for August because only 59,000 units were produced. (a) State the total monthly budgeted cost formula. (Round cost per unit to 2 decimal places, e.g. 1.25.) The formula is $ + variable costs of $ per unit. (b) Prepare a budget report for August using flexible budget data. (List variable costs before fixed costs.) RATCHET COMPANY Assembling Department Flexible Budget Report For the Month Ended August 31, 2020
Transcribed Image Text:Ratchet Company uses budgets in controlling costs. The August 2020 budget report for the company's Assembling Department is as follows. RATCHET COMPANY Budget Report Assembling Department For the Month Ended August 31, 2020 Difference Manufacturing Costs Budget Actual Favorable Unfavorable Neither Favorable nor Unfavorable Variable costs Direct materials $51, 240 $50, 240 $1,000 Favorable Direct labor 56, 120 52, 920 3,200 Favorable Indirect materials 25, 620 25,920 300 Unfavorable Indirect labor 21,960 21, 560 400 Favorable Utilities 21,350 21, 180 170 Favorable Maintenance 7,320 7,760 440 Unfavorable Total variable 183,610 179, 580 4,030 Favorable Fixed costs Rent 10,600 10,600-0- Neither Favorable nor Unfavorable Supervision 18, 500 18,500 -0- Neither Favorable nor Unfavorable Depreciation 6, 900 6,900 -0- Neither Favorable nor Unfavorable Total fixed 36,000 36,000-0- Neither Favorable nor Unfavorable Total costs $219,610 $215, 580 $4,030 Favorable The monthly budget amounts in the report were based on an expected production of 61,000 units per month or 732, 000 units per year. The Assembling Department manager is pleased with the report and expects a raise, or at least praise for a job well done. The company president, however, is unhappy with the results for August because only 59,000 units were produced. (a) State the total monthly budgeted cost formula. (Round cost per unit to 2 decimal places, e.g. 1.25.) The formula is $ + variable costs of $ per unit. (b) Prepare a budget report for August using flexible budget data. (List variable costs before fixed costs.) RATCHET COMPANY Assembling Department Flexible Budget Report For the Month Ended August 31, 2020
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