Chacha Inc is a manufacturing firm and has provided following data related to costs: 

Details……………………….…..Fixed Cost/Month ($)…………..Cost/unit of production ($) 

Wages and Salaries…………………….. 22700………………………….. 16 

Parts and Supplies………………………..x………………………………….. 8 

Equipment Depreciation…………….. 1500………………………….. 0.4 

Lorry Operating Expenses…………….. 5800………………………….. 1.4 

Rent…………………………………………….. 3370 …………………….……. x 

Administrative Expenses…………….. 4500………………………….. 0.7 

Chacha computes the total costs as “fixed cost/month plus variable cost”. The company expected to produce 2700 units in May, but actually produced 3000 units. The product’s selling price is $44 per unit. 

Instructions: 

a) Prepare static budget at the company's expected level of production

b) Prepare a flexible budget at the company's actual level of production

c) Indicate the variances weather favorable or unfavorable

Answer rating: 100% (QA)

Requirement a Chacha computers Production department Static Budget For the month e... View the full answer