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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 $427,000 21,000 36,000 $484,000 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 May 98,000 June 89,000 July 80,000 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 484,000. 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: $457,000 434,000 413,000 Wages per hour Utility cost per direct labor hour Direct labor hours per unit Dlanned monthly unit production $20.00 $1.00 0.20 106 000

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 $427,000 21,000 36,000 $484,000 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 May 98,000 June 89,000 July 80,000 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 484,000. 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: $457,000 434,000 413,000 Wages per hour Utility cost per direct labor hour Direct labor hours per unit Dlanned monthly unit production $20.00 $1.00 0.20 106 000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Part b also, I'm not able to post it

### Hagerstown Company Machining Department Budget for the Three Months Ending July 31 **Objective:** 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. #### Production Data: **Units of Production:** - May: 98,000 - June: 89,000 - July: 80,000 #### Budget Structure: For each month, there are input fields to enter specific budgetary details. It includes placeholders for inserting values such as: - Costs per unit - Aggregate monthly costs **Total:** - This section represents the cumulative cost after inputs are provided. #### Supporting Calculations: Each month requires detailed breakdowns including: 1. **Units of Production** - May: 98,000 - June: 89,000 - July: 80,000 2. **Hours Per Unit** - Input field: Multiply units by hours per unit 3. **Total Hours of Production** - Calculate: Units of production x Hours per unit 4. **Wages Per Hour** - Input field: Determine the hourly wage rate 5. **Total Wages** - Calculate: Total hours of production x Wages per hour 6. **Utility Costs Per Hour** - Input field: Determine the cost per hour for utilities 7. **Total Utility Costs** - Calculate: Total hours of production x Utility costs per hour This structure ensures accurate budgeting by considering variation in production volumes and their impact on labor and utility costs.
Transcribed Image Text:### Hagerstown Company Machining Department Budget for the Three Months Ending July 31 **Objective:** 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. #### Production Data: **Units of Production:** - May: 98,000 - June: 89,000 - July: 80,000 #### Budget Structure: For each month, there are input fields to enter specific budgetary details. It includes placeholders for inserting values such as: - Costs per unit - Aggregate monthly costs **Total:** - This section represents the cumulative cost after inputs are provided. #### Supporting Calculations: Each month requires detailed breakdowns including: 1. **Units of Production** - May: 98,000 - June: 89,000 - July: 80,000 2. **Hours Per Unit** - Input field: Multiply units by hours per unit 3. **Total Hours of Production** - Calculate: Units of production x Hours per unit 4. **Wages Per Hour** - Input field: Determine the hourly wage rate 5. **Total Wages** - Calculate: Total hours of production x Wages per hour 6. **Utility Costs Per Hour** - Input field: Determine the cost per hour for utilities 7. **Total Utility Costs** - Calculate: Total hours of production x Utility costs per hour This structure ensures accurate budgeting by considering variation in production volumes and their impact on labor and utility costs.
**Static Budget versus Flexible Budget** 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: $427,000 - Utilities: $21,000 - Depreciation: $36,000 - **Total: $484,000** 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 | |-------|--------------|----------------| | May | $457,000 | 98,000 | | June | $434,000 | 89,000 | | July | $413,000 | 80,000 | 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 $484,000. 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: $20.00 - Utility cost per direct labor hour: $1.00 - Direct labor hours per unit: 0.20 - Planned monthly unit production: 106,000
Transcribed Image Text:**Static Budget versus Flexible Budget** 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: $427,000 - Utilities: $21,000 - Depreciation: $36,000 - **Total: $484,000** 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 | |-------|--------------|----------------| | May | $457,000 | 98,000 | | June | $434,000 | 89,000 | | July | $413,000 | 80,000 | 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 $484,000. 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: $20.00 - Utility cost per direct labor hour: $1.00 - Direct labor hours per unit: 0.20 - Planned monthly unit production: 106,000
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