An analysis of the overhead costs reveals that all variable costs are controllable by the manager of the Mixing Department and the 50% of the supervisory costs are controllable at the department level.
The flexible budget formula and the cost and activity for the months of July and August are as follows:
Flexible Budget Per
Direct Labor Hour Actual Costs Actual Costs
Direct labor hours 6,000 7,000
Indirect materials $3.50 $20,500 $25,100
Indirect labor 6.00 39,500 40,700
Factory supplies 1.00 9,600 8,200
Depreciation $20,000 15,000 15,000
Supervision 20,000 18,000 20,900
Property taxes 5,000 12,000 12,000
Total costs $114,500 $121,900
(a) Prepare the responsibility reports for the Mixing Department for each month.
(b) Comment on the manager's performance in controlling costs during the two month period.
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Data xxx working
|An xxxxxxxx of the xxxxxxxx costs xxxxxxx that xxx xxxxxxxx xxxxx xxx controllable by xxx xxxxxxx xx the Mixing Department and the 50% of xxx supervisory xxxxx xxx xxxxxxxxxxxx at the department xxxxxx|
|The xxxxxxxx xxxxxx formula and xxx xxxx xxx activity for xxx months of July xxx August xxx xx xxxxxxxx|
|xxxxxxxx xxxxxx xxx||xxxxxx costx||xxxxxx costx||Budgeted xxxxx||Budgeted cost|
|Direct xxxxx xxxxx||xxxxxx Labor Hourx||Direct xxxxx Hourx||xxxxxx xxxxx Hour|
|Direct labor hours||xxxxx||7000x||xxxx||xxxx|
|(a) xxxxxxx xxx xxxxxxxxxxxxxx xxxxxxx xxx xxx Mixing Department for xxxx xxxxxx|
|xxx Comment xx the xxxxxxxxx performance in xxxxxxxxxxx costs xxxxxx xxx xxx xxxxx xxxxxxx|
|xxx the Month xxxxx July xxx xxxx|
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