Question

Merriman Manufacturing Inc. has the following flexible budget formulas and amounts:
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 20 per unit
Direct materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 per unit
Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 per unit
Variable factory overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 per unit
Variable selling and administrative expense . . . . . . . . . . . . . ...1 per unit
Fixed factory overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . $20,000 per month
Fixed selling and administrative expense . . . . . . . . . . . . . . $15,000 per month
Actual results for May for the production and sale of 6,000 units were as follows:
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $125,000
Direct materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,000
Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,000
Variable factory overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,500
Variable selling and administrative expense . . . . . . . . . . . . ...... 6,500
Fixed factory overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,750
Fixed selling and administrative expense . . . . . . . . . . . . . . . .... 14,500
Prepare a performance report for May that includes the identification of the favorable and unfavorable variances.



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  • CreatedMay 05, 2014
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