An analysis of the overhead costs reveals that all variable costs are controllable by the manager of the Mixing Department and the 50% of the supervisory costs are controllable at the department level.
The flexible budget formula and the cost and activity for the months of July and August are as follows:
Flexible Budget Per
Direct Labor Hour Actual Costs Actual Costs
Direct labor hours 6,000 7,000
Indirect materials $3.50 $20,500 $25,100
Indirect labor 6.00 39,500 40,700
Factory supplies 1.00 9,600 8,200
Depreciation $20,000 15,000 15,000
Supervision 20,000 18,000 20,900
Property taxes 5,000 12,000 12,000
Total costs $114,500 $121,900
(a) Prepare the responsibility reports for the Mixing Department for each month.
(b) Comment on the manager's performance in controlling costs during the two month period.
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|An analysis of the overhead xxxxx reveals xxxx xxx variable xxxxx xxx controllable by xxx manager xx the xxxxxx Department xxx xxx xxx of xxx xxxxxxxxxxx costs xxx xxxxxxxxxxxx at xxx xxxxxxxxxx level.|
|xxx xxxxxxxx xxxxxx formula xxx xxx xxxx xxx activity xxx xxx xxxxxx xx xxxx and xxxxxx are xx follows:|
|Flexible Budget Per||xxxxxx costx||xxxxxx costx||xxxxxxxx xxxx||Budgeted xxxx|
|xxxxxx xxxxx xxxxx||Direct xxxxx xxxxx||Direct xxxxx Hour||Direct xxxxx Hour|
|Direct labor xxxxxx||6000x||xxxxx||6000||xxxx|
|(a) xxxxxxx the xxxxxxxxxxxxxx reports for xxx Mixing Department for each month.|
|(b) Comment xx the xxxxxxxxx xxxxxxxxxxx xx xxxxxxxxxxx costs xxxxxx the two xxxxx period.|
|For xxx Month xxxxx xxxx xxx xxxx|
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