Hello I am working on the assignment below but I am unsure o

Hello, I am working on the assignment below, but I am unsure of how to solve it. I would be very grateful for help in solving this assignment.

1. Gundy Company expects to produce 1,242,000 units of Product XX in 2017. Monthly production is expected to range from 72,700 to 109,700 units. Budgeted variable manufacturing costs per unit are: direct materials $4, direct labor $7, and overhead $10. Budgeted fixed manufacturing costs per unit for depreciation are $4 and for supervision are $3.

In March 2017, the company incurs the following costs in producing 91,200 units: direct materials $392,800, direct labor $634,400, and variable overhead $915,000. Actual fixed costs were equal to budgeted fixed costs.

Prepare a flexible budget report for March. (List variable costs before fixed costs.)

2. Levine Inc., which produces a single product, has prepared the following standard cost sheet for one unit of the product.

GUNDY COMPANY Manufacturing Flexible Budget Report For the Month Ended March 31, 2017
					Difference
	Budget		Actual		Favorable Unfavorable Neither Favorable nor Unfavorable
DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable CostsUnits Produced
DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable CostsUnits Produced
DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable CostsUnits Produced	$		$		$	FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable CostsUnits Produced						FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable CostsUnits Produced						FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable CostsUnits Produced	$		$		$	FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable CostsUnits Produced
DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable CostsUnits Produced						FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable CostsUnits Produced						FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable CostsUnits Produced						FavorableUnfavorableNeither Favorable nor Unfavorable
DepreciationDirect LaborDirect MaterialsFixed CostsOverheadSupervisionTotal CostsTotal Fixed CostsTotal Variable CostsVariable CostsUnits Produced	$		$		$	FavorableUnfavorableNeither Favorable nor Unfavorable

Solution

Answers

Under Flexible Budget, Variable costs are changes on the basis of Budget as per actual level of activity while fixed cost remains as budgeted.

Flexible Budget Report, as asked:

UNDY COMPANY

Manufacturing Flexible Budget Report

For the Month Ended March 31, 2017

Difference

Budget

Actual

Amount

Favorable/Unfavorable/Neither Favorable nor Unfavourable

Units Produced

91200

91200

Neither Favorable nor Unfavorable

Variable Costs:

Direct Labor

$      638,400.00

$      634,400.00

$      4,000.00

Favorable

Direct Materials

$      364,800.00

$      392,800.00

$ (28,000.00)

Unfavorable

Overhead

$      912,000.00

$      915,000.00

$   (3,000.00)

Unfavorable

Total Variable Costs

$ 1,915,200.00

$ 1,942,200.00

$ (27,000.00)

Unfavorable

Fixed Costs

Depreciation

$      414,000.00

$      414,000.00

$                   -  

Neither Favorable nor Unfavorable

Supervision

$      310,500.00

$      310,500.00

$                   -  

Neither Favorable nor Unfavorable

Total Fixed Costs

$      724,500.00

$     724,500.00

$                   -  

Neither Favorable nor Unfavorable

Total Costs

$ 2,639,700.00

$ 2,666,700.00

$ (27,000.00)

Unfavorable

Working:

UNDY COMPANY

Manufacturing Flexible Budget Report

For the Month Ended March 31, 2017

Difference

Budget

Actual

Amount

Favorable/Unfavorable/Neither Favorable nor Unfavourable

[A]

[B]

[C = A – B]

Units Produced

91200

91200

[C = A – B]

Neither Favorable nor Unfavorable

Variable Costs:

[C = A – B]

Direct Labor

=91200*7

634400

[C = A – B]

Favorable

[C = A – B]

Direct Materials

=91200*4

392800

[C = A – B]

Unfavorable

Overhead

=91200*10

915000

[C = A – B]

Unfavorable

Total Variable Costs

TOtal

Total

[C = A – B]

Unfavorable

[C = A – B]

Fixed Costs

[C = A – B]

Depreciation

=+(1242000/12)*4

414000

[C = A – B]

Neither Favorable nor Unfavorable

Supervision

=+(1242000/12)*3

310500

[C = A – B]

Neither Favorable nor Unfavorable

Total Fixed Costs

TOtal

TOtal

[C = A – B]

Neither Favorable nor Unfavorable

Total Costs

Grand total

Grand total

[C = A – B]

Unfavorable

Working for Standard data for Actual output

Actual DATA for

260

units

Quantity (AQ)

Rate (AR)

Actual Cost

Direct Material

2400

$              2.600

$             6,240.00

Direct labor

1310

$              11.80

$           15,458.00

Standard DATA for

260

units

Quantity (SQ)

Rate (SR)

Standard Cost

Direct Material

2080

$                2.40

$             4,992.00

Direct labor

1300

$              12.00

$           15,600.00

Note: Spending Variance = Total Variance (Material or Labor)

All variances asked, including calculations:

Material Price Variance

(

Standard Rate

-

Actual Rate

)

x

Actual Quantity

(

$                        2.40

-

$                       2.60

)

x

2400

-480

Variance

$                  480.00

Unfavourable-U

Material Quantity Variance

(

Standard Quantity

-

Actual Quantity

)

x

Standard Rate

(

2080

-

2400

)

x

$                           2.40

-768

Variance

$                  768.00

Unfavourable-U

Material Spending Variance

(

Standard Cost

-

Actual Cost

)

(

$               4,992.00

-

$              6,240.00

)

-1248

Variance

$              1,248.00

Unfavourable-U

Labor Rate Variance

(

Standard Rate

-

Actual Rate

)

x

Actual Labor Hours

(

$                     12.00

-

$                    11.80

)

x

1310

262

Variance

$                  262.00

Favourable-F

Labour Efficiency Variance

(

Standard Hours

-

Actual Hours

)

x

Standard Rate

(

1300

-

1310

)

x

$                        12.00

-120

Variance

$                  120.00

Unfavourable-U

Labor Spending Variance

(

Standard Cost

-

Actual Cost

)

(

$             15,600.00

-

$            15,458.00

)

142

Variance

$                  142.00

Favourable-F

UNDY COMPANY
Manufacturing Flexible Budget Report
For the Month Ended March 31, 2017
			Difference
	Budget	Actual	Amount	Favorable/Unfavorable/Neither Favorable nor Unfavourable
Units Produced	91200	91200		Neither Favorable nor Unfavorable
Variable Costs:
Direct Labor	$      638,400.00	$      634,400.00	$      4,000.00	Favorable
Direct Materials	$      364,800.00	$      392,800.00	$ (28,000.00)	Unfavorable
Overhead	$      912,000.00	$      915,000.00	$   (3,000.00)	Unfavorable
Total Variable Costs	$ 1,915,200.00	$ 1,942,200.00	$ (27,000.00)	Unfavorable
Fixed Costs
Depreciation	$      414,000.00	$      414,000.00	$                   -	Neither Favorable nor Unfavorable
Supervision	$      310,500.00	$      310,500.00	$                   -	Neither Favorable nor Unfavorable
Total Fixed Costs	$      724,500.00	$     724,500.00	$                   -	Neither Favorable nor Unfavorable
Total Costs	$ 2,639,700.00	$ 2,666,700.00	$ (27,000.00)	Unfavorable