eBook

Print Item

Question Content Area

Performance Report Based on Actual Production

Ladan Suriman, controller for Healthy Pet Company, has been instructed to develop a flexible budget for overhead costs. The company produces two types of dog food. BasicDiet is a standard mixture for healthy dogs. SpecialDiet is a reduced protein formulation for older dogs with health problems. The two dog foods use common raw materials in different proportions. The company expects to produce 80,000 bags of each product during the coming year. BasicDiet requires 0.20 direct labor hour per bag, and SpecialDiet requires 0.30 direct labor hour per bag. Ladan has developed the following fixed and variable costs for each of the four overhead items:

Overhead Item	Fixed Cost	Variable Rate per Direct Labor Hour
Maintenance	$ 57,250	$0.50
Power		0.40
Indirect labor	43,500	2.10
Rent	39,000

Assume that Healthy Pet actually produced 100,000 bags of BasicDiet and 90,000 bags of SpecialDiet. The actual overhead costs incurred were as follows:

Maintenance	$81,300
Power	18,700
Indirect labor	$143,600
Rent	39,000

Required:

1. Calculate the number of direct labor hours budgeted for actual production of the two products.

fill in the blank 1 hours

2. Prepare a performance report for the period based on actual production. If an amount box does not require an entry, enter "0". Enter a favorable variance as a negative amount, and an unfavorable variance as a positive amount. If an amount is zero, enter "0" and choose "Not applicable" from the dropdown list.

	Healthy Pet Company
	Performance Report - Overhead
	For the Current Year
	Actual	Budgeted	Variance
Units produced	fill in the blank 2	fill in the blank 3	fill in the blank 4	FavorableUnfavorableNot applicable
Production unit:
Maintenance	$fill in the blank 6	$fill in the blank 7	$fill in the blank 8	FavorableUnfavorableNot applicable
Power	fill in the blank 10	fill in the blank 11	fill in the blank 12	FavorableUnfavorableNot applicable
Indirect labor	fill in the blank 14	fill in the blank 15	fill in the blank 16	FavorableUnfavorableNot applicable
Rent	fill in the blank 18	fill in the blank 19	fill in the blank 20	FavorableUnfavorableNot applicable
Total overhead	$fill in the blank 22	$fill in the blank 23	$fill in the blank 24