Millenium is a company engaged in New York, currently making shoes for jogging sports with the brand "Garsel".The brand is still a brand that is favored by customers so garsel dominates the market in the majority.

Production for June 2019 is budgeted as follows:

• The unit's product budget is 15,000 pairs
• Selling price rp350.000 per pair in budget statistics
• Budget unit variable cost is as follows:

Direct material Rp150.000

Direct labor costs 7 hours of work at an hourly rate of Rp9,000

Factory overhead costs rp65,000

• Fixed cost budgeted at 250 million with relevant range of 0 - 15000 pairs of shoes
• Actual products for June 2019 only reached 13500 pairs of shoes

Competition in the jogging specialty shoe market is still low so that the company can still raise its actual selling price by up to 10% without losing customers.The company in fact in June managed to make savings by implementing a stricter SOP so that the direct workforce can be saved by 5%.

Fixed costs actually increased by 5%

Assume there are no initial and final supplies for Raw material, work in process or finish good

Asked:.

1. Create a flexible budget according to the data.
2. Calculate Static budget variance Determine whether the difference is favorable or not.
3. If the company wants to obtain optimal operating profit what you recommend to your boss.

Answer rating: 100% (QA)

Answer To create a flexible budget we need to adjust the budgeted costs and revenues based on the ac... View the full answer