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)						9,600						9,120
Direct labor	(		q)			$195,130			$192,000
Indirect labor	(		+	$1.20	q)		$3,028	F	$19,060
Utilities	(	$7,700	+		q)		$1,570	U		$912	U	$25,028
Supplies	(		+		q)	$5,108			$4,564	$144		$4,420
Equipment depreciation	(	$81,400	)				$0	None		$0	None
Factory administration	(	$18,940	+	$1.10	q)
Total expense						$353,420

Answer 1

Solution:

Ray Company
Production Department Flexible Budget Performance Report
For the Month Ended August 31
Particulars						Actual Results	Spending Variances		Flexible Budget	Activity Variances		Planning Budget
Labor-hours (q)						9,600			9600			9,120
Direct labor	(	$20	q)			$195,130.00	$3,130.00	U	$192,000.00	$9,600.00	U	$182,400.00
Indirect labor	(	$7,540.00	+	$1.20	q)	$16,032.00	$3,028.00	F	$19,060.00	$576.00	U	$18,484.00
Utilities	(	$7,700	+	$1.90	q)	$27,510.00	$1,570.00	U	$25,940.00	$912.00	U	$25,028.00
Supplies	(	$1,684.00	+	$0.30	q)	$5,108.00	$544.00	U	$4,564.00	$144.00	U	$4,420.00
Equipment depreciation	(	$81,400	)			$81,400.00	$0.00	None	$81,400.00	$0.00	None	$81,400.00
Factory administration	(	$18,940	+	$1.10	q)	$28,240.00	$1,260.00	F	$29,500.00	$528.00	U	$28,972.00
Total expense						$353,420.00	$956.00	U	$352,464.00	$11,760.00	U	$340,704.00