# Monthly and Fixed Cost Budget Report - Excel

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```					Demonstration Problem
Glenda Company uses a flexible budget for manufacturing overhead based on direct
labor hours. For 2005 the master overhead budget for the Packaging Department
at normal capacity of 300,000 direct labor hours was as follows.

Variable Costs                        Fixed Costs
Indirect labor\$     360,000              Supervision \$     60,000
150,000
Supplies and lubricants                  Depreciation      24,000
Maintenance         210,000              Property taxes    18,000
Utilities           120,000              Insurance         12,000
\$     840,000                          \$    114,000

During July, 24,000 direct labor hours were worked. The company incurred the following variable costs in July:
indirect labor \$30,200, supplies and lubricants \$11,600, maintenance \$17,500, and utilities \$9,200. Actual fixed
overhead costs were the same as monthly budgeted fixed costs.

Instructions
Prepare a flexible budget report for the Packaging Department for July.

SOLUTION TO DEMONSTRATION PROBLEM
Glenda Company
Packaging Department
For the Month Ended July 31, 2005

Difference
Favorable F
Unfavorable U
Budget Actual Costs
Direct labor hours (DLH)            24,000 DLH  24,000 DLH
Variable costs
Indirect labor                    \$      28,800     \$ 30,200   \$ 1,400    U
Supplies and lubricants                  12,000       11,600      (400)   F
Maintenance                              16,800       17,500       700    U
Utilities                                 9,600        9,200      (400)   F
Total variable                         67,200       68,500     1,300    U

Fixed costs
Supervision                               5,000        5,000
Depreciation                              2,000        2,000
Property taxes                            1,500        1,500
Insurance                                 1,000        1,000
Total fixed                             9,500        9,500       -
Total costs                         \$      76,700     \$ 78,000   \$ 1,300    U
Questions :
1. If we produced 3,200 units what would be the actual cost per unit produced during the period ?
2. If we produced 3,200 units what would be the budgeted cost per unit produced during the period ?

```
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Description: Monthly and Fixed Cost Budget Report document sample