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Required: 2 Which of the two budgets would be more useful when planning the company's cash needs over a range of activity? 3. Prepare a performance report that compares static budget and actual costs for the period just ended (.e., the report that Kellerman likely used when assessing his performance). 4. Prepare a performance report that compares flexible budget and actual costs for the period just ended (l.e., the report that the general manager likely used when assessing Kellerman's performance).

Required: 2 Which of the two budgets would be more useful when planning the company's cash needs over a range of activity? 3. Prepare a performance report that compares static budget and actual costs for the period just ended (.e., the report that Kellerman likely used when assessing his performance). 4. Prepare a performance report that compares flexible budget and actual costs for the period just ended (l.e., the report that the general manager likely used when assessing Kellerman's performance).

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 87,000 fans evenly over the next quarter at the following costs: direct material, $1,914,000; direct labor, $435,000; variable production overead, $639,450; and fixed production overhead, $966,000. The $966,000 amount includes $84,000 of straight-line depreciation and $126,000 of supervisory salaries. Shortly after the conclusion of the quarter's first month, Johnson reported the following costs: Direct saterial Direct labor Variable production overhead Depreciation Supervisory salaries Other fixed production overhead Total 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 of keeping his job. Required: 2. Which of the two budgets would be more useful when planning the company's cash needs over a range of activity? 3. Prepare a performance report that compares static budget and actual costs for the period just ended (.e., the report that Kellerman likely used when assessing his performance). 4. Prepare a performance report that compares flexible budget and actual costs for the period just ended (l.e, the report that the general manager likely used when assessing Kellerman's performance). 5-a. Which of the following two reports is preferred? 5-b. Which of the following statements is false? $619,700 134,400 217,000 28,000 44,908 250.000 $1,204,000 Complete this question by entering your answers in the tabs below. Reg 2 Reg 3 Total Rec 4 Rec SA Prepare a performance report that compares static budget and actual costs for the period just ended (Le, the report that Kellerman likely used when assessing his performance). (Indicate the effect of each vanance by selecting "Favorable" or "Unfavorable". Select "Nane" and enter "0" for no effect (1.e., zero variance). Do not round intermediate calculations. Statlo Budget 28,000 Unite Rea Se (Reg 2 Actual 29,000 Units Reg 4 > Variance Show less A
Transcribed Image Text:Problem 11-39 Budgets and Performance Evaluation (LO 11-1, 11-6) Johnson Electrical produces Industrial ventilation fans. The company plans to manufacture 87,000 fans evenly over the next quarter at the following costs: direct material, $1,914,000; direct labor, $435,000; variable production overead, $639,450; and fixed production overhead, $966,000. The $966,000 amount includes $84,000 of straight-line depreciation and $126,000 of supervisory salaries. Shortly after the conclusion of the quarter's first month, Johnson reported the following costs: Direct saterial Direct labor Variable production overhead Depreciation Supervisory salaries Other fixed production overhead Total 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 of keeping his job. Required: 2. Which of the two budgets would be more useful when planning the company's cash needs over a range of activity? 3. Prepare a performance report that compares static budget and actual costs for the period just ended (.e., the report that Kellerman likely used when assessing his performance). 4. Prepare a performance report that compares flexible budget and actual costs for the period just ended (l.e, the report that the general manager likely used when assessing Kellerman's performance). 5-a. Which of the following two reports is preferred? 5-b. Which of the following statements is false? $619,700 134,400 217,000 28,000 44,908 250.000 $1,204,000 Complete this question by entering your answers in the tabs below. Reg 2 Reg 3 Total Rec 4 Rec SA Prepare a performance report that compares static budget and actual costs for the period just ended (Le, the report that Kellerman likely used when assessing his performance). (Indicate the effect of each vanance by selecting "Favorable" or "Unfavorable". Select "Nane" and enter "0" for no effect (1.e., zero variance). Do not round intermediate calculations. Statlo Budget 28,000 Unite Rea Se (Reg 2 Actual 29,000 Units Reg 4 > Variance Show less A
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