P24-3A Hill Company uses budgets in controlling costs.
The August 2014 budget report for the company’s Assembling Department is as
follows.
Prepare a budget report for August using flexible budget data. (List variable costs before fixed costs. If answer is zero, please enter 0, do not leave any fields blank.)
In September, 64,000 units were produced. Prepare the budget report using flexible budget data, assuming (1) each variable cost was 10% higher than its actual cost in August, and (2) fixed costs were the same in September as in August. (List variable costs before fixed costs. If answer is zero, please enter 0, do not leave any fields blank.)
TUTORIAL PREVIEW
State the total monthly budgeted cost formula. (Round variable cost per unit to 2 decimal places, e.g. 1.55.)
(a) The formula is fixed costs $36,480 plus total variable costs of $3.17
File name: P24-3A Hill Company.doc File type: doc PRICE: $10
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HILL COMPANY
Budget Report Assembling Department For the Month Ended August 31, 2014 |
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Difference
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Manufacturing Costs |
Budget |
Actual |
Favorable (F)
Unfavorable (U) |
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|
Variable costs
|
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|
Direct materials
|
$54,000
|
$53,000
|
$1,000
|
F
|
||||
|
Direct labor
|
55,800
|
52,710
|
3,090
|
F
|
||||
|
Indirect materials
|
28,800
|
28,940
|
140
|
U
|
||||
|
Indirect labor
|
19,800
|
19,330
|
470
|
F
|
||||
|
Utilities
|
18,000
|
17,810
|
190
|
F
|
||||
|
Maintenance
|
13,800
|
14,160
|
360
|
U
|
||||
|
Total variable
|
190,200
|
185,950
|
4,250
|
F
|
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|
Fixed costs
|
||||||||
|
Rent
|
10,860
|
10,860
|
–0–
|
|||||
|
Supervision
|
18,100
|
18,100
|
–0–
|
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|
Depreciation
|
7,520
|
7,520
|
–0–
|
|||||
|
Total fixed
|
36,480
|
36,480
|
–0–
|
|||||
|
Total costs
|
$226,680
|
$222,430
|
$4,250
|
F
|
||||
The monthly budget amounts in the report were based on
an expected production of 60,000 units per month
or 720,000 units per year. The Assembling Department manager is
pleased with the report and expects a raise, or at least praise for a job well
done. The company president, however, is unhappy with the results for August
because only 58,000 units were produced.
State the total
monthly budgeted cost formula. (Round variable
cost per unit to 2 decimal places, e.g. 1.55.)
Prepare a budget report for August using flexible budget data. (List variable costs before fixed costs. If answer is zero, please enter 0, do not leave any fields blank.)
In September, 64,000 units were produced. Prepare the budget report using flexible budget data, assuming (1) each variable cost was 10% higher than its actual cost in August, and (2) fixed costs were the same in September as in August. (List variable costs before fixed costs. If answer is zero, please enter 0, do not leave any fields blank.)
TUTORIAL PREVIEW
State the total monthly budgeted cost formula. (Round variable cost per unit to 2 decimal places, e.g. 1.55.)
(a) The formula is fixed costs $36,480 plus total variable costs of $3.17
File name: P24-3A Hill Company.doc File type: doc PRICE: $10
