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 atthe following costs: direct material, $1,914,000; direct labor, $435,000; variable production overead, $639,450; and fixed productionoverhead, $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 saterialDirect laborVariable production overheadDepreciationSupervisory salariesOther fixed production overheadTotalDave 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.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 Kellermanlikely 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 thegeneral 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?$619,700134,400217,00028,00044,908250.000$1,204,000Complete this question by entering your answers in the tabs below.Reg 2Reg 3TotalRec 4Rec SAPrepare a performance report that compares static budget and actual costs for the period just ended (Le, the report that Kellermanlikely 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 Budget28,000 UniteRea Se(Reg 2Actual29,000 UnitsReg 4 >VarianceShow less A

The company's Budget for the Quarter and the Actual Cost for the 1st Month : Particulars…

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

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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