Jackson Companys budgeted prices for direct materials direct

Jackson Company\'s budgeted prices for direct materials, direct manufacturing labor, and direct marketing (distribution) labor per attaché case are $42, $8, and $15, respectively. The president is pleased with the following performance report: ?(Click the icon to view the performance report.) Actual output was 9,600 attaché cases. Assume all three direct-cost items above are variable costs. Requirement Is the president\'s pleasure justified? Prepare a revised performance report that uses a flexible budget and a static budget Prepare a revised performance report that uses a flexible budget and a static budget. Begin with the actual results, then complete the flexible budget columns and the static budget columns. Label each variance as favorable (F) or unfavorable (U). (For variances with a S0 balance, field. If the variance is zero, do not select a label.) make sure to enter \"O\" in the appropriate Actual Flexible-Budget Flexible Sales-Volume Static Results Variance Budget Variance Budget Output units Direct materials Direct manufacturing labor Direct marketing labor Total direct costs Is the president\'s pleasure justified?

Solution

1 2     (1-3) 3 4 (5-3) 5 Budgeted Amounts per Unit Actual Results Flexi Budget Variance Flexible Budget (Output Units*cost per unit) Sales Volume Variance Static Budget Output Units 9000 9000 9000 Direct Material 42 417600 39600 U 378000 75600 F 453600 Direct Mfg. Labor 8 84600 12600 U 72000 14400 F 86400 Direct Mkt. Labor 15 151000 16000 U 135000 27000 F 162000 Total Direct Cost 653200 68200 U 585000 117000 F 702000 Flexi Budget Variance (A) 68200 U Sales Volume Variance (B) 117000 F Static Budget Variance (A+B) 48800 F