MA46 Problem: Budgeting – Moore Company

MA46 Problem: Budgeting – Moore Company

The following performance report is for the bottling department Moore Company for the month endingDecember 31, 20x6.

 Actual Budget Variance

Volume (units)

75,00090,000

Manufacturing costs:

Direct materials

$156,000$180,000$24,000 (F)

Direct labour 

835,000900,00065,000 (F)

Variable overhead

360,000450,00090,000 (F)

Fixed overhead

60,00054,0006,000 (U)

Total

$1,411,000$1,584,000$173,000 (F)

 Required -

1.

Evaluate the performance report.2.

Using a flexible budgeting approach, prepare a more appropriate performance report (i.e., produce a flexible budget and indicate planning and flexible budgetvariances).