ACC EXCEL

ACC EXCEL only one question

Static &

F

lexible Budget

nits

Budget

Units

/ Unit

Costs (Selling)

																																																														Static Budget @
	9,000																	U			Flexible
9000
	Price	$ 31					$ 31.00
	Sales	$ 279,000
		Variable Costs	Variable	Cost
		Variable Manufacturing Costs	$ 189,000
		Shipping	$ 5,400
	Administrative Costs	$ 1,800
		Total Variable Costs	$ 196,200
	Fixed Expenses
		Fixed Manufacturing Costs	$ 3 Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	7,000
	Fixed Selling & Administrative Costs			$ 33,000
	Total	Fixed Costs				$ 70,000
	Operating Income (Loss)	$ 12,800

Flexible Budget for Sales Level

Flexible Budget

Units

7,000

9,000

Price $ 31.00 $ 31.00 $ 31.00 $ 31.00
Sales

Variable Costs
Variable Manufacturing Costs
Shipping Costs (Selling)
Administrative Costs
Total Variable Costs

Fixed Expenses

Fixed Manufacturing Costs
Fixed Selling & Administrative Costs
Operating Income (Loss)

Flexible Budget for Various Levels
Formula	8,000	Varying levels of output
$ 217,000.00	$ 248,000.00	$ 279,000.00	Sales Forecasts
Contribution Margin
Total Fixed Costs

Further Look at

Variances

Costs

Flexible

Budget Variances

Units

7000

Variable Costs

$ 70,000

F

U

F

U

U

U

Variable Manufacturing Costs

U

Shipping

$ 4,200

U

U

Total Variable Costs

U

Fixed Costs

U

$ 5,000 $ 5,000

$ 15,000 $ – 0

$ 2,600 $ – 0

Fixed Manufacturing Costs

$ 300 U

$ 33,000 $ 33,000 $ – 0

Total Fixed Costs

$ 70,000 $ 300 U

U

		Actual	Flexible-Budget	Favorable or	Possible
Incurred	Unfavorable	Explanation
	7000
								Direct Materials	$ 69,920	$ (80)
								Direct Labor	$ 61,500		$	56,000	$ 5,500
Indirect Labor	$ 9,100	$ 11,900	$ (2,800)	Decreased setup time
Idel Time	$ 3,550	$ 2,800	$ 750	Excessive machine breakdowns
Cleanup Time	$ 2,500	$ 2,100	$ 400	Cleanup of spilled solvent
Supplies	$ 4,700		$ 4,200	$ 500	Higher prices
$ 151,270	$ 147,000	$ 4,270
		$ 5,000	$ 800	Use of air freight to meet delivery
Administration	$ 2,000	$ 1,400	$ 600	Excessive copying and long-distance calls
$ 158,270	$ 152,600	$ 5,670
Factory Supervision	$ 14,700	$ 14,400			$ 300	Salary increase
Factory Rent				$ – 0
Equipment Depreciation		$ 15,000
Other Fixed Factory Costs		$ 2,600
$ 37,300	$ 37,000
Fixed Selling & Admin. Costs
$ 70,300
Total Variable & Fixed Costs	$ 228,570	$ 222,600	$ 5,970

Direct Materials & Labor

Flexible Budget

Direct Materials

0

F

Direct Labor

U

7,000 units

Quantity

per

Cost

of Output

per Unit of Output Allowed

Direct Materials

$ 70,000

Direct Labor

$8 $ 56,000

Direct Materials

pounds

$69,920

Direct Labor

hours

$61,500

56,000

		Actual Cost Incurred	Flexible-Budget Variance	Favorable/Unfavorable
	$69,920	$70,000		$8
	$61,500	$56,000	$5,500		7,000 units	9,000 units
Extra Information
				Standard	of Input				Standard Price	Flexible Budget Formula
	Allowed		per Unit	Unit of Input
	5 pounds	$2/pound	$10
30 minutes	$16/hour
What Actually Happened
What was used (7,000 units)	Actual Rate	Totals
		36,800	$1.90/pound (Discount)
	3,750	$16.40/hour
	35,000	Pounds we budgeted
Hours we budgeted

Price Variance

Direct Materials
Standard

36,800

Direct Labor
Acutal

Standard

Actual Quanity 3,750

(Actual Price – Standard Price) x Actual quantity used
	Acutal	$ 1.90	Less
	$ 2.00
	Actual Quanity
$ 16.40	More	Overtime
	$ 16.00

Quantity Variance

Direct Materials

Actual 36,800
Standard 35,000
Standard Price $ 2.00

Direct Labor

Actual

Standard

Standard Price $ 16.00

(Actual Quantity Used – Standard Quantity Allowed for Actual Output) x Standard Price

3,750.00

3,500.00

Flexible Budget Variance

Direct Materials F
Flexible Budget Variance
Direct Labor U

Price Variance + Quantity Variance = Flexible Budget Variance

Homework Question #1

Standard Price

per Unit

of Input

Direct Materials 5 pounds

Direct Labor

Flexible

Direct Materials Actual Cost Incurred Price Variance

Quantity Variance Budget

Cost with Flexible

Direct Labor Actual Cost Incurred Price Variance Standard Prices Quantity Variance Budget

Question 1: Find the standard cost for direct materials and direct labor
Standard Inputs Expected
for Each Unit of
Output Achieved
$10 per pound
10 hours	$25 per hour
550 Trumpets are scheduled to be produced but only 525 were produced
3,100 pounds of direct materials at a price of $9.00/pound were used
5,500 hours of direct labor at a rate of $26/hour was used
Question 2: Find the price and quantity variances for direct materials and labor
	Cost with
	Standard Prices
Question 3: What clues for investigatoin are found in the variances?