please answer within 30 minutes. Problem 11-39 Budgets and Performance Evaluation (LO 11-1, 11-6)Johnson Electrical produces industrial ventilation fans. The company plans to manufacture 81,000 fans evenly over the next quarter atthe following costs: direct material, $1,863,000; direct labor, $567,000; variable production overhead, $643,950; and fixed productionoverhead, $966,000. The $966,000 amount includes $99,000 of straight-line depreciation and $123,000 of supervisory salaries.Shortly after the conclusion of the quarter's first month, Johnson reported the following costs:Direct materialDirect laborVariable production overheadDepreciationSupervisory salariesOther fixed production overhead$ 603,300185, 000218, 00033,00043,300246,000Total$1,328,600Dave Kellerman and his crews turned out 26,000 fans during the month-a remarkable feat given that the firm's manufacturing plantwas closed for several days because of storm damage and flooding. Kellerman was especially pleased with the fact that overallfinancial performance for the period was favorable when compared with the budget. His pleasure, however, was very short-lived, asJohnson's general manager issued a stern warning that performance must improve, and improve quickly, if Kellerman had any hopesof keeping his job. Req 2Req 3Req 4Req SAReq 5BWhich of the two budgets would be more useful when planning the company's cash needs over a range of activity?would be more useful.Req 2Req 3Req 4Req SAReq 5BPrepare a performance report that compares static budget and actual costs for the period just ended (i.e., the report that Kellermanlikely used when assessing his performance). (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select"None" and enter "0" for no effect (i.e., zero variance). Do not round intermediate calculations.)Static Budget:Actual:27,000 Units26,000 UnitsVarianceTotalReq 2Reg 3Req 4Reg 5AReg 5BPrepare a performance report that compares flexible budget and actual costs for the period just ended (i.e., the report that the generalmanager likely used when assessing Kellerman's performance). (Indicate the effect of each variance by selecting "Favorable" or"Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance). Do not round intermediate calculations.)Flexible Budget:Actual:26,000 Units26,000 UnitsVarianceTotalReq 2Req 3Req 4Req 5AReq 5BWhich of the following two reports is preferred?A performance report based onReq 2Req 3Req 4Req 5AReq 5BWhich of the following statements is false?OThe general manager's warning is appropriate because of the sizable variances that have arisen.OWith the static budget, performance appears favorable.OKellerman's assessment regarding the favorable overall performance for the period is correct.

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Problem 11-39 Budgets and Performance Evaluation (LO 11-1, 11-6) Johnson Electrical produces industrial ventilation fans. The company plans to manufacture 81,000 fans evenly over the next quarter at the following costs: direct material, $1,863,000; direct labor, $567,000; variable production overhead, $643,950; and fixed production overhead, $966,000. The $966,000 amount includes $99,000 of straight-line depreciation and $123,000 of supervisory salaries. Shortly after the conclusion of the quarter's first month, Johnson reported the following costs: $ 603,300 185,e00 218,e00 33, еее 43,300 246,000 Direct material Direct labor Variable production overhead Depreciation Supervisory salaries Other fixed production overhead Total $1,328,600 Dave Kellerman and his crews turned out 26,000 fans during the month-a remarkable feat given that the firm's manufacturing plant was closed for several days because of storm damage and flooding. Kellerman was especially pleased with the fact that overall financial performance for the period was favorable when compared with the budget. His pleasure, however, was very short-lived, as Johnson's general manager issued a stern warning that performance must improve, and improve quickly, if Kellerman had any hopes

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q