For the 1 st quarter of 2014, the company made the following budget. Sales 100,0
ID: 2380773 • Letter: F
Question
For the 1st quarter of 2014, the company made the following budget.
Sales 100,000 units
Selling price $40 per unit
Production 120,000 units
Production Cost:
Direct material $6 per unit
Direct labor $8 per unit
Variable overhead $1 per unit
Fixed overhead $240,000
Selling Cost:
Variable selling cost $2 per unit
Fixed selling $80,000
The following shows the actual performance for 2014 quarter 1
Sales 98000 units
Selling price $40.00 per unit
Production 110,000 units
Total direct material cost $693,000
Total direct labor cost $860,000
Variable overhead $120,000
Fixed overhead $245,000
Variable selling cost $200,000;
fixed selling cost $80,000
For each item, determine if the company
Explanation / Answer
Revenue = 100,000*40 - 98000*40 = $80,000 U
Direct material cost = 110000*6 - 693000 = $33000 U
Direct labor cost = 110000*8 - 860000 = $20000 F
Variable overhead = 1*110000 - 120000 = $10000 U
Fixed overhead = 2*110000 - 245000 = $25000 U
Variable selling cost = 98000*2 - 200000 = $4000 U
Fixed selling.= 98000*0.80 - 80000 = $1600 U