SANOFI Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows: Indirect Labor $1 Indirect Materials $1 Utilities $0 Fixed Overhead Cost Per Month: Supervision $4.000 Depreciation $1.500 Property Taxes $800 In July 2021, SANOVI Company incurred the following manufacturing Overhead Cost: Variable Cost Fixed Cost Indirect Labor $8.700 Supervision $4.000 Indirect Materials $4.300 Depreciation $1.500 Utilities $3.200 Property Taxes $800 Instructions: (please shows the computation) Prepare a flexible budget performance report, assuming that the company worked 8.800 direct labor hours during the month. Prepare a flexible budget performance report, assuming that the company worked 8.500 direct labor hours during the month. Comment on your findings.
SANOFI Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows: Indirect Labor $1 Indirect Materials $1 Utilities $0 Fixed Overhead Cost Per Month: Supervision $4.000 Depreciation $1.500 Property Taxes $800 In July 2021, SANOVI Company incurred the following manufacturing Overhead Cost: Variable Cost Fixed Cost Indirect Labor $8.700 Supervision $4.000 Indirect Materials $4.300 Depreciation $1.500 Utilities $3.200 Property Taxes $800 Instructions: (please shows the computation) Prepare a flexible budget performance report, assuming that the company worked 8.800 direct labor hours during the month. Prepare a flexible budget performance report, assuming that the company worked 8.500 direct labor hours during the month. Comment on your findings.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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SANOFI Company uses a flexible budget for manufacturing
| Indirect Labor | $1 | |||||
| Indirect Materials | $1 | |||||
| Utilities | $0 | |||||
| Fixed Overhead Cost Per Month: | ||||||
| Supervision | $4.000 | |||||
| $1.500 | ||||||
| Property Taxes | $800 | |||||
| In July 2021, SANOVI Company incurred the following manufacturing Overhead Cost: | ||||||
| Variable Cost | Fixed Cost | |||||
| Indirect Labor | $8.700 | Supervision | $4.000 | |||
| Indirect Materials | $4.300 | Depreciation | $1.500 | |||
| Utilities | $3.200 | Property Taxes | $800 |
|
Instructions: (please shows the computation)
- Prepare a flexible budget performance report, assuming that the company worked 8.800 direct labor hours during the month.
- Prepare a flexible budget performance report, assuming that the company worked 8.500 direct labor hours during the month.
- Comment on your findings.
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