Question

Gundy Company expects to produce 1,220,400 units of Product XX in 2020. Monthly production is expected to range from 73,000 to 115,000 units. Budgeted variable manufacturing costs per unit are: direct materials $4, direct labor $7, and overhead $9. Budgeted fixed manufacturing costs per unit for depreciation are $5 and for supervision are $3. In March 2020, the company incurs the following costs in producing 94,000 units: direct materials $400,000, direct labor $652,000, and variable overhead $850,000. Actual fixed costs were equal to budgeted fixed costs. Prepare a flexible budget report for March. (List variable costs before fixed costs.)

Answer 1

To prepare a flexible budget report for March, calculate the total variable and fixed manufacturing costs for the actual production level of 94,000 units. Then, list the variable costs before the fixed costs in the report.

Step-by-step explanation:

To prepare a flexible budget report for March, we need to calculate the budgeted variable manufacturing costs and the budgeted fixed manufacturing costs for the actual production level of 94,000 units. Let's break down the calculation step by step:

1. Calculate the total variable manufacturing costs for the actual production level of 94,000 units: Direct materials cost = 94,000 units * $4 per unit = $376,000, Direct labor cost = 94,000 units * $7 per unit = $658,000, Variable overhead cost = 94,000 units * $9 per unit = $846,000.
2. Calculate the total fixed manufacturing costs for the actual production level of 94,000 units: Depreciation cost = 94,000 units * $5 per unit = $470,000, Supervision cost = 94,000 units * $3 per unit = $282,000.
3. Prepare the flexible budget report, listing the variable costs before the fixed costs:

Answer 2

Please refer explanation and attachment.

Step-by-step explanation:

A flexible budget report compares the actual results of a particular period to the budgeted results. In this case, the actual production costs to the budgeted production costs in March 2020. This is calculated by finding the difference between the budgeted cost and the actual cost for every variable as well as fixed cost incurred. When the actual cost is higher than the budgeted cost, the variance is unfavorable and when the actual cost is lower than the budgeted cost, the variance is favorable. Please refer attached table for the flexible budget as well as calculations.