Question

Wade Company estimates that it will produce 6,000 units of product IOA during the current month. Budgeted variable manufacturing costs per unit are direct materials $5, direct labor $11, and overhead $17. Monthly budgeted fixed manufacturing overhead costs are $7,500 for depreciation and $3,500 for supervision. In the current month, Wade actually produced 6,500 units and incurred the following costs: direct materials $27,500, direct labor $65,000, variable overhead $110,000, depreciation $7,500, and supervision $3,700. Prepare a static budget report. Hint: The Budget column is based on estimated production while the Actual column is the actual cost incurred during the period. (List variable costs before fixed costs.) Wade Company Static Budget Report Difference Budget Actual Favorable Unfavorable Neither Favorable nor Unfavorable $ $ $ $ $ $

Answer 1

Step-by-step explanation:

STATIC BUDGET ACTUAL VARIANCE

Units 6000 6500

variable costs

Direct material 30000 27500 2500 favorable

Direct labor 66000 65000 1000 favorable

Manufacturing overhead 102000 110000 8000 Unfavorable

Fixed costs

Depreciation 7500 7500 None

supervision 3500 3700 200 Unfavorable

Total expenses 209000 213700 4700 unfavorable