Posted: July 13th, 2016

# Complete the following performance report for June?

Exercise 15.2 Flexible budgeting

Rocky Mountain Manufacturing produces a single product.
The original budget for November was based on expected production of 35,000 units; actual production for November was 33,250 units. The original budget and actual costs incurred for the manufacturing department follow:

Original Budget Actual Costs

Direct materials . . . . . . . . . . . . . . . . \$ 551,250 …….\$ 541,500
Direct labor . . . . . . . . . . . . . . . . . . . 427,000………… 413,500
Variable overhead . . . . . . . . . . . . . . 217,000………… 195,250
Fixed overhead . . . . . . . . . . . . . . . . 170,000 …………………172,500
Total. . . . . . . . . . . . . . . . . . . . . . . \$1,365,250 …….\$1,322,750

Required:
Prepare an appropriate performance report for the manufacturing department.

Performance reporting and flexible budgeting. For the stamping department of a manufacturing firm, the standard cost for direct labor is \$12 per hour, and the production standard calls for 1,000 stampings per hour. During June, 168 hours were required for actual production of 148,000 stampings. Actual direct labor cost for the stamping department for June was \$2,184.

Required:
a. Complete the following performance report for June:
Flexed Budget Actual Budget Variance
b. Analyze the budget variance by calculating the direct labor efficiency and rate variances for June.
c. What alternatives to the preceding monthly report could improve control over the stamping department’s direct labor?

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