) The production supervisor of the Machining Department for Hagerstown Company agreed to the following monthly static budget for the upcoming year: Hagerstown Company Machining Department Monthly Production Budget Wages Utilities Depreciation Total The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows: Amount Spent Units Produced 100,000 91,000 82,000 The Machining Department supervisor has been very pleased with this performance because actual expenditures for May-July have been significantly less than the monthly static budget of 1,373,000. However, manager believes that the budget should not remain fixed for every month but should "flex" or adjust to the volume of work that is produced in the Machining Department. Additional budget information for the Machining Department is as follows: May June July $1,294,000 1,234,000 1,177,000 $1,199,000 65,000 109,000 $1,373,000 Wages per hour Utility cost per direct labor hour. Direct labor hours per unit Planned monthly unit production $22.00 $1.20 0.50 109,000 a. Prepare a flexible budget for the actual units produced for May, June, and July in the Machining Department. Assume depreciation is a fixed cost. If required, use per unit amounts carried out to two decimal places. Line Item Description Units of production Wages Hagerstown Company Machining Department Budget For the Three Months Ending July 31 June 91,000 May 100,000 July 82,000
) The production supervisor of the Machining Department for Hagerstown Company agreed to the following monthly static budget for the upcoming year: Hagerstown Company Machining Department Monthly Production Budget Wages Utilities Depreciation Total The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows: Amount Spent Units Produced 100,000 91,000 82,000 The Machining Department supervisor has been very pleased with this performance because actual expenditures for May-July have been significantly less than the monthly static budget of 1,373,000. However, manager believes that the budget should not remain fixed for every month but should "flex" or adjust to the volume of work that is produced in the Machining Department. Additional budget information for the Machining Department is as follows: May June July $1,294,000 1,234,000 1,177,000 $1,199,000 65,000 109,000 $1,373,000 Wages per hour Utility cost per direct labor hour. Direct labor hours per unit Planned monthly unit production $22.00 $1.20 0.50 109,000 a. Prepare a flexible budget for the actual units produced for May, June, and July in the Machining Department. Assume depreciation is a fixed cost. If required, use per unit amounts carried out to two decimal places. Line Item Description Units of production Wages Hagerstown Company Machining Department Budget For the Three Months Ending July 31 June 91,000 May 100,000 July 82,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
4
Transcribed Image Text:The production supervisor of the Machining Department for Hagerstown Company agreed to the following monthly static budget for the upcoming year:
Hagerstown Company
Machining Department
Monthly Production Budget
Wages
Utilities
Depreciation
Total
The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows:
Amount Spent Units Produced
100,000
91,000
$1,294,000
1,234,000
1,177,000
May
June
July
82,000
The Machining Department supervisor has been very pleased with this performance because actual expenditures for May-July have been significantly less than the monthly static budget of 1,373,000.
However, the plant manager believes that the budget should not remain fixed for every month but should "flex" or adjust to the volume of work that is produced in the Machining Department. Additional
budget information for the Machining Department is as follows:
Wages per hour
Utility cost per direct labor hour
Direct labor hours per unit
Planned monthly unit production
$1,199,000
65,000
109,000
$1,373,000
$22.00
$1.20
0.50
a. Prepare a flexible budget for the actual units produced for May, June, and July in the Machining Department. Assume depreciation is a fixed cost. If required, use per unit amounts carried out to two
decimal places.
Line Item Description
Units of production
Wages
109,000
Hagerstown Company
Machining Department Budget
For the Three Months Ending July 31
June
91,000
May
100,000
July
82,000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education