Darden Medical Equipment Company makes a blood pressure measuring kit. Dan Bushaw is the production manager. The
Question:
Darden Medical Equipment Company makes a blood pressure measuring kit. Dan Bushaw is the production manager. The production department's static budget and actual results for 2009 follow.
Required
a. Convert the static budget into a flexible budget.
b. Use the flexible budget to evaluate Mr. Bushaw's performance.
c. Explain why Mr. Bushaw's performance evaluation does not include sales revenue and netincome.
Transcribed Image Text:
Static Budget Actual Results Direct materials Direct labor Variable manufacturing overhead Total variable costs Fixed manufacturing overhead Total manufacturing cost 20,000 kits $154,000 136,000 37.000 327,000 167,000 $494,000 21,000 kits S166,000 139,800 46,600 352,400 164,000 16,400 ー
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a b Static Budget Per Unit Cost 20000 Kits Direct materials 154000 770 Direct labor 136000 680 Varia...View the full answer
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