Raney Company uses a flexible budget for manufacturing overhead based on direct labor hours

ACC 560 Week 6 Assignment

E10-4 Raney Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows.
Indirect labor $1.00
Indirect materials 0.50
Utilities 0.40

Fixed overhead costs per month are: Supervision $4,000, Depreciation $1,500, and Property Taxes $800. Assume that in July 2008, Raney Company incurs the following manufacturing overhead costs.
Variable Costs Fixed Costs
Indirect labor $8,700 Supervision $4,000
Indirect materials 4,300 Depreciation 1,500
Utilities 3,200 Property taxes 800

Instructions
a) Prepare a flexible budget performance report, assuming that the company worked 9,000 direct labor hours during the month.
b) Prepare a flexible budget performance report, assuming that the company worked 8,500 direct labor hours during the month.
c) Comment on your finding

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Jael Equipment uses a flexible budget for its indirect manufacturing costs

Jael Equipment uses a flexible budget for its indirect manufacturing costs. For 20x4, the company anticipated that it would produce 18,000 units with 3,500 machine-hours and 7,200 employee days. The costs and cost drivers were to be as follows:

Fixed Variable Cost driver
Product handling $30,000 $0.40 per unit
Inspection 8,000 8.00 per 100 unit batch
Utilities 400 4.00 per 100 unit batch
Maintenance 1,000 0.20 per machine-hour
Supplies 5.00 per employee day

During the year, the company processed 20,000 units, worked 7,500 employee days, and had 4,000 machine-hours. The actual costs for 20x4 were:

Actual costs
Product handling $36,000
Inspection 9,000
Utilities 1,600
Maintenance 1,200
Supplies 37,500

Required:
a. Prepare the static budget using the overhead items above and then compute the static-budget variances.
b. Prepare the flexible budget using the overhead items above and then compute the flexible-budget variances.

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Tylon's Hardware uses a flexible budget to develop planning information for its warehouse operations

Tylon's Hardware uses a flexible budget to develop planning information for its warehouse operations. For 20X2, the company anticipated that it would have 96,000 sales units for 664 customer shipments. Average storage bin usage for various inventories was estimated to be 200 per day. The costs and cost drivers were determined to be as follows:

Item Fixed Variable Cost driver

Product handling $10,000 $1.25 per 100 units

Storage - 3.00 per storage bin

Utilities 1,000 1.50 per 100 units

Shipping clerks 1,000 1.00 per shipment

Supplies - 0.50 per shipment

During the year, the warehouse processed 90,000 units for 600 customer shipments. The workers used 225 storage bins on average each day to sort, store, and process goods for shipment. The actual costs for 20X2 were:

Item Actual costs

Product handling $10,900

Storage 465

Utilities 2,020

Shipping clerks 1,400

Supplies 340

Question 1: Determine the 20X2 static budget variances.

Question 2: Determine the 20X2 flexible budget variances.

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