Pacific Company provides the following information about its standard costs per unit along with its budgeted and actual results for June. Although the budgeted June volume was 25,000 units produced and sold, the company actually produced and sold 27,000 units.

Required
1. Prepare June's flexible budgets showing budgeted sales, costs, and income assuming 20,000,25,000,27,000, and 30,000 units produced and sold.
2. Prepare a flexible budget performance report for the actual volume of 27,000 units.
3. Apply variance analysis for direct materials and direct labor.
4. Compute the overhead variance and the controllable and volume variances.

Transcribed Image Text:

Standard Quantity and Cost Direct materials.... Direct labor... Overhead Flexible Budget and Actual Results Selling price..... Variable costs (per unit) Direct materials.. Direct labor.... Indirect materials Utilities* Shipping. Fixed costs (per month) 4 ounces per unit @ $0.31 per ounce 0.125 DLH per unit @ $32 per DLH $21.20 per DLH ($6 variable, $15.20 fixed) Depreciation Insurance.. Administrative salaries... "Indicates overhead item. Machinery. Budget (25,000 units) $10.00 per unit 1.24 per unit 4.00 per unit 0.25 per unit 0.50 per unit 0.40 per unit $47,500 1,200 10,000 Actual quantity and cost to produce 27,000 units Direct materials (110,000 oz. $0.28 per oz.).. Direct labor (2,700 DLH@ $37.00 per DLH).. Overhead ($9.990 + $16,200+ $47,500) Actual (27,000 units) $282,420 $ 30,800 99,900 9,990 16,200 9,180 $ 47,500 1,290 10,060 Actual Cost $30,800 99,900 73,690