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 $0\mathrm{.}20$ direct labor hour per bag, and SpecialDiet requires $0\mathrm{.}30$ direct labor hour per bag. Ladan has developed the following fixed and variable costs for each of the four overhead items:

Variable Rate per Direct

$\backslash$table$[[$Overhead Item,Fixed Cost,Labor Hour$],[$Maintenance$,$$$57,250,$$$0\mathrm{.}50$