Problem 11-37 Flexible Budgeting At the beginning of last year, Jade Kamm, contr

Question

Problem 11-37 Flexible Budgeting At the beginning of last year, Jade Kamm, controller for Jager Inc., prepared the following budget for conversion costs at two levels of activity for the coming year: Direct Labour Hours 100,000 $1,000,000 180,000 18,000 225,000 25,000 240,000 120,000 60,000 $1,868,000 120,000 Direct labour Supervision Utilities Depreciation Supplies Maintenance Rent Other $1,200,000 180,000 21,000 225,000 30,000 284,000 120,000 70,000 $2.130,000 Total manufacturing cost Continued

Explanation / Answer

Particulars Cost formula Actual Revenue and spending variance Flexible budget Activity variance Static budget direct labor hours 112000 112000 120000 Direct labor 10q 963200 156800 F 1120000 80000 1200000 Supervision 180000 190000 10000 U 180000 0 180000 Utilities 3000+.15q 20500 700 U 19800 1200 F 21000 Depreciation 225000 225000 0 225000 0 225000 Supplies .25q 24640 3360 F 28000 2000 F 30000 Maintainence 20000+2.2q 237000 29400 F 266400 17600 F 284000 Rent 120000 120000 0 120000 0 120000 other 10000+.5q 60500 5500 F 66000 4000 F 70000 Total manufacturing cost 1840840 184360 F 2025200 104800 F 2130000

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