Problem 10-3A (Part Level Submission) Hill Company uses budgets in controlling costs. The August 2014 budget report for the company’s Assembling Department is as follows. HILL COMPANY
Budget Report
Assembling Department
For the Month Ended August 31, 2014 | | | | | Difference |
Manufacturing Costs
|
Budget
|
Actual
| Favorable F
Unfavorable U
Neither Favorable
nor Unfavorable N | Variable costs | | | | | Direct materials | $52,200 | $51,200 | $1,000 | F | Direct labor | 55,200 | 52,420 | 2,780 | F | Indirect materials | 29,400 | 29,640 | 240 | U | Indirect labor | 21,600 | 21,150 | 450 | F | Utilities | 16,800 | 16,700 | 100 | F | Maintenance | 9,600 | 9,710 | 110 | U | Total variable | 184,800 | 180,820 | 3,980 | F | Fixed costs | | | | | Rent | 12,590 | 12,590 | –0– | N | Supervision | 16,020 | 16,020 | –0– | N | Depreciation | 6,640 | 6,640 | –0– | N | Total fixed | 35,250 | 35,250 | –0– | N | Total costs | $220,050 | $216,070 | $3,980 | F |
The monthly budget amounts in the report were based on an expected production of 60,000 units per month or 720,000 units per year. The Assembling Department manager is pleased with the report and expects a raise, or at least praise for a job well done. The company president, however, is unhappy with the results for August because only 58,000 units were produced.
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Fin-Acc-Boss
11 years ago
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