Question

Ray Company provided the following excerpts from its Production Department’s flexible budget performance report. (Round "rate per hour" answers to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Ray Company
Production Department Flexible Budget Performance Report
For the Month Ended August 31
						Actual Results	Spending Variances		Flexible Budget	Activity Variances		Planning Budget
Labor-hours (q)						9,570						9,090
Direct labor	(		q)			$179,145			$177,045
Indirect labor	(		+	$1.50	q)		$1,870	F	$21,865
Utilities	(	$7,400	+		q)		$1,540	U		$768	U	$21,944
Supplies	(		+		q)	$5,066			$4,534	$144		$4,390
Equipment depreciation	(	$80,650	)				$0	None		$0	None
Factory administration	(	$18,880	+	$1.80	q)
Total expense						$343,984

Answer 1

				Actual	Spending variance		Flexible	Activity variance		Planning
				results			budget			budget
labor hours				9,570			9,570			9,090
Direct labor			18.5	179,145	2,100	U	177,045	8,880	U	168165
Indirect labor		7,510	1.5	19,995	1,870	F	21,865	720	U	21145
Utilities		7,400	1.6	24,252	1,540	U	22,712	768	U	21,944
Supplies		1,663	0.3	5,066	532	U	4,534	144	U	4,390
Equipment depreciation		80,650		80,650	0	N	80,650	0	N	80,650
Factory administration		18,880	1.8	34,876	1,230	F	36106	864	U	35242
total expense				343,984	1,072	U	342,912	11,376	U	331536