View the step-by-step solution to: managerial accounting -- revised performance report on a

This question was answered on Feb 25, 2012. View the Answer
managerial accounting -- revised performance report on a flexible budget
managerial accounting assignment.docx

Braemar Saddlery uses department budgets and performance reports in planning and controlling its manufacturing
operations. The following annual performance report for the custom saddle production department was presented to
the president of the company:
Budgeted
Costs
for 5,000
Units
Per Unit
Variable
manufactur
ing costs:
Direct
materials
Direct
labor
Indire
ct labor
Indire
ct
materials,
supplies,
etc.
Tota
l variable
manufactur
ing costs
Fixed
manufactur
ing costs:
Lease
rental
Salari
es of
foremen
Depre
ciation and
other
Tota
l fixed
manufactur
ing costs

$

Actual
Costs
Incurred
Total

Over
(Under)
Budget

30.00

$ 150,000

$ 171,000

48.00

240,000

261,500

21,500

15.00

75,000

95,500

20,500

9.00

45,000

48,400

3,400

$

102.00

$ 510,000

$ 576,400

$

66,400

$

9.00

$

$

45,000

$

0

$

5,000

45,000

24.00

125,000

15.00

$

120,000
75,000

78,600

48.00

$ 240,000

$ 248,600

$

21,000

3,600

$

8,600

Total
manufactur
ing costs

$

150.00

$ 750,000

$ 825,000

$

75,000

Although a production volume of 5,000 saddles was originally budgeted for the year, the actual volume of
production achieved for the year was 6,000 saddles. Direct materials and direct labor are charged to production at
actual cost. Factory overhead is applied to production at the predetermined rate of 150 percent of the actual direct
labor cost.
After a quick glance at the performance report showing an unfavorable manufacturing cost variance of $75,000, the
president said to the accountant: "Fix this thing so it makes sense. It looks as though our production people really
blew the budget. Remember that we exceeded our budgeted production schedule by a significant margin. I want this
performance report to show a better picture of our ability to control costs."
Instructions
a. Prepare a revised performance report for the year on a flexible budget basis. Use the same format as the
production report above, but revise the budgeted cost figures to reflect the actual production level of 6,000
saddles. (Leave no cells blank - be certain to enter "0" wherever required. Amounts to be deducted should
be indicated with a minus sign. Round your per unit answers to 1decimal place. Omit the "$" sign in your
response.)
BRAEMAR SADDLERY
Performance Report for Custom Saddle Production Dept.
For the Year Ended December 31, 20__
Actual
Budgeted Costs
Costs
for 6,000 Units
Incurred
Per Unit
Total

Over
(or Under)
Budget

Variable manufacturing
costs:
$

Total variable
manufacturing costs

$

$

$

$

$

$

$

$

$

$

$

Fixed manufacturing costs:

Total fixed
manufacturing costs
Total manufacturing costs

$

$

$

$

$

$

$

$

b. What is the amount of over- or underapplied manufacturing overhead for the year? (Note that a standard cost
system is not used.) (Omit the "$" sign in your response.)
Manufacturing overhead applied
Underapplied manufacturing
overhead

$
$

Sign up to view the entire interaction

The solution is... View the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors and customizable flashcards—available anywhere, anytime.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access or to earn money with our Marketplace.

    Browse Documents
  • 890,990,898

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
  • 890,990,898

    Flashcards

    Browse existing sets or create your own using our digital flashcard system. A simple yet effective studying tool to help you earn the grade that you want!

    Browse Flashcards