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Using Flexible Budgets The following summary data are from a performance report for Sterling Company for May, during which 16,800 units were produced. The budget reflects the company's normal capacity of 17,500 units. Actual Cost Budget 16,800 units 17,500 Variances Direct material Direct labor Variable overhead units $68.400 $70.000 $(1.600) Favorable 138,600 140,000 (1,400) Favorable 49.200 48.000 1,200 Unfavorable $ Туре Fixed overhead Total 36,200 36,000 200 Unfavorable $292.400 $294,000 $(1.600) a. Prepare a new performance report using flexible budgeting. Round all amounts to the nearest dollar. Direct material Direct labor Variable overhead Fixed overhead Totals $ Actual Costs Flexible Budget 0 $ 0 $ 0 0 0 0 0 $ 0 0 0 $ Variance Туре 0 0 0 0 0 b. Which of the two performance reports should Sterling Company management use to measure the company's operating efficiency in May? =

Using Flexible Budgets The following summary data are from a performance report for Sterling Company for May, during which 16,800 units were produced. The budget reflects the company's normal capacity of 17,500 units. Actual Cost Budget 16,800 units 17,500 Variances Direct material Direct labor Variable overhead units $68.400 $70.000 $(1.600) Favorable 138,600 140,000 (1,400) Favorable 49.200 48.000 1,200 Unfavorable $ Туре Fixed overhead Total 36,200 36,000 200 Unfavorable $292.400 $294,000 $(1.600) a. Prepare a new performance report using flexible budgeting. Round all amounts to the nearest dollar. Direct material Direct labor Variable overhead Fixed overhead Totals $ Actual Costs Flexible Budget 0 $ 0 $ 0 0 0 0 0 $ 0 0 0 $ Variance Туре 0 0 0 0 0 b. Which of the two performance reports should Sterling Company management use to measure the company's operating efficiency in May? =

Principles of Cost Accounting
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead
Section: Chapter Questions
Problem 16E: Determining Budgeted Overhead The overhead application rate for a company is 10 per unit, made up of...
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Using Flexible Budgets The following summary data are from a performance report for Sterling Company for May, during which 16,800 units were produced. The budget reflects the company's normal capacity of 17,500 units. Actual Cost Budget Direct material Direct labor Variable overhead Fixed overhead Total 16,800 units 17,500 Variances $ Туре units $68.400 $70,000 $(1.600) Favorable 138,600 140,000 (1,400) Favorable 49.200 48.000 1,200 Unfavorable 36,200 36,000 200 Unfavorable $292,400 $294,000 $(1.600) a. Prepare a new performance report using flexible budgeting. Round all amounts to the nearest dollar. Actual Costs Flexible Budget Direct material $ 0 $ 0 $ Direct labor 0 0 Variable overhead 0 0 Fixed overhead Totals $ 0 0 0 $ 0 $ Variance Туре 0 0 0 0 0 b. Which of the two performance reports should Sterling Company management use to measure the company's operating efficiency in May?
Transcribed Image Text:Using Flexible Budgets The following summary data are from a performance report for Sterling Company for May, during which 16,800 units were produced. The budget reflects the company's normal capacity of 17,500 units. Actual Cost Budget Direct material Direct labor Variable overhead Fixed overhead Total 16,800 units 17,500 Variances $ Туре units $68.400 $70,000 $(1.600) Favorable 138,600 140,000 (1,400) Favorable 49.200 48.000 1,200 Unfavorable 36,200 36,000 200 Unfavorable $292,400 $294,000 $(1.600) a. Prepare a new performance report using flexible budgeting. Round all amounts to the nearest dollar. Actual Costs Flexible Budget Direct material $ 0 $ 0 $ Direct labor 0 0 Variable overhead 0 0 Fixed overhead Totals $ 0 0 0 $ 0 $ Variance Туре 0 0 0 0 0 b. Which of the two performance reports should Sterling Company management use to measure the company's operating efficiency in May?
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