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Homework answers / question archive / Gundy Company expects to produce 1,316,400 units of Product XX in 2020
Gundy Company expects to produce 1,316,400 units of Product XX in 2020. Monthly production is expected to range from 75,000 to 123,000 units. Budgeted variable manufacturing costs per unit are: direct materials $5, direct labor $6, and overhead $10. Budgeted fixed manufacturing costs per unit for depreciation are $4 and for supervision are $2. In March 2020, the company incurs the following costs in producing 99,000 units: direct materials $515,000, direct labor $593,000, and variable overhead $996,000. Actual fixed costs were equal to budgeted fixed costs. Prepare a flexible budget report for March. (List variable costs before fixed costs.) GUNDY COMPANY Manufacturing Flexible Budget Report For the Month Ended March 31, 2020 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Budget Actual Direct Materials Direct Materials Were costs controlled?
Solution:
| Gundy Company | ||||
| Manufacturing flexible budget report | ||||
| For the month ended March 31, 2017 | ||||
| Particulars | Budget | Actual | Variance | Favorable / Unfavorable / Neither favorable nor unfavorable |
| Unit Produced | 99000 | 99000 | ||
| Variable Costs: | ||||
| Direct Material | $4,95,000.00 | $5,15,000.00 | $20,000.00 | Unfavorable |
| Direct labor | $5,94,000.00 | $5,93,000.00 | $1,000.00 | Favorable |
| Variable overhead | $9,90,000.00 | $9,96,000.00 | $6,000.00 | Unfavorable |
| Total variable costs | $20,79,000.00 | $21,04,000.00 | $25,000.00 | Unfavorable |
| Fixed Costs: | ||||
| Depreciation | $4,38,800.00 | $4,38,800.00 | $0.00 | Neither Favorable nor Unfavorable |
| Supervision | $2,19,400.00 | $2,19,400.00 | $0.00 | Neither Favorable nor Unfavorable |
| Total Fixed Costs | $6,58,200.00 | $6,58,200.00 | $0.00 | Neither Favorable nor Unfavorable |
| Total Costs | $27,37,200.00 | $27,62,200.00 | $25,000.00 | Unfavorable |
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