Home products company manufactures a complete line of

Reference no: EM13607942

Home Products Company manufactures a complete line of kitchen glass-ware. The Beverage Division specializes in 12-ounce drinking glasses. Erin Fisher, the superintendent of the Beverage Division, asked the controller to prepare a report of her division's performance in April. The following report was handed to her a few days later:

Cost Category (Variable Unit Cost) Budgeted Costs Actual Costs Difference Under (Over Budget

Direct materials ($.10) $ 5,000 $ 4.975 5 $25
Direct labor ($.12) 6,000 5,850 150
Variable overhead
Indirect labor ($.03) 1,500 1,290 210 Supplies ($.02) 1,000 960 40
Heat and power ($.03) 1.500 1,325 175 Other $.05) 2,500 2,340 160
Fixed overhead
Heat and power 3,500 3,500 - Depreciation 4,200 4,200 -
Insurance and taxes 1,200 1,200 -
Other 1,600 1,600 -
Totals $28,000 $27,240 $760

Required

Prepare a flexible budget for the Beverage Division using production levels of 45.000 units. 50,000 units. and 55,000 units.
What is the flexible budget formula?
Assume that the Beverage Division produced 46,500 units in April and that all fixed costs remained constant. Prepare a revised report similar to the one above, using actual production in units as a basis for the budget column

Reference no: EM13607942

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