Problem 21-45

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 100,000 bags of each product during the coming year. BasicDiet requires 0.30 direct labor hours per bag, and SpecialDiet requires 0.40 direct labor hours per bag. Ladan has developed the following fixed and variable costs for each of the four overhead items:

2. Prepare a performance report for the period based on actual production. In the variance type column, type "F" for favorable and "U" for unfavorable. If the variance is zero, enter ("0") in the variance amount column and "N" for neither in the variance type column. (Note: Be sure to use capital letters.)