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Pacific Company_Flexible Budget

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Question;Pacific Company;provides the following information about its budgeted and actual results for;June 2013. Although the expected volume for June was 25,000 units produced;and sold, the company actually produced and sold 27,000 units.;Budget data ?;25,000 units;(asterisks;identify factory overhead items);Selling price;$5.00 per unit;Variable costs;(per unit of output);Direct materials;1.24 per unit;Direct labour;1.50 per unit;*Factory supplies;0.25 per unit;*Utilities;0.50 per unit;Selling costs;0.40 per unit;Fixed costs (per;month);*Amortization of machinery;$3,750;*Amortization of building;2,500;General liability insurance;1,200;Property taxes on office equipment;500;Other administrative expense;750;Actual data ?;27,000 units;(asterisks;identify factory overhead items);Selling price;$5.23 per unit;Variable costs;(per unit of output);Direct materials;1.12 per unit;Direct labour;1.40 per unit;*Factory supplies;0.37 per unit;*Utilities;0.60 per unit;Selling costs;0.34 per unit;Fixed costs (per;month);*Amortization of machinery;$3,710;*Amortization of building;2,500;General liability insurance;1,250;Property taxes on office equipment;485;Other administrative expense;900;Standard;manufacturing costs based on expected output of 25,000 units;Per Unit of Output;Quantity to be Used;Total Cost;Direct materials;4 grams @ $0.31/g;$1.24/unit;100,000 g;$31,000;Direct labour;0.25 hr @$6.00/hr;$1.50/unit;6,250 hr;37,500;Overhead;$1.00/unit;25,000;Actual;costs incurred to produce 27,000 units;Per Unit of Output;Quantity to be;Used;Total Cost;Direct materials;4 grams @ $0.28/g;$1.12/unit;108,000 g;$30,240;Direct labour;0.20 hr @$7.00/hr;$1.40/unit;5,400 hr;37,800;Overhead;Standard costs;based on expected output of 27,000;units;$1.20/unit;32,400;Per Unit of Output;Quantity to be Used;Total Cost;Direct materials;4 grams @ $0.31/g;$1.24/unit;108,000 g;$33,480;Direct labour;0.25 hr @$6.00/hr;$1.50/unit;6,750 hr;40,500;Overhead;26,500;Required;1. Prepare flexible budgets for June;showing expected sales, costs, and income under assumptions of 20,000;25,000, and 30,000 units of output produced and sold.;2. Prepare a flexible budget performance;report that compares actual results with the amounts budgeted if the actual;volume had been expected.;3.;Apply variance analyses for direct materials, and direct labour.

 

Paper#44637 | Written in 18-Jul-2015

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