SOLUTION
Chapter 10 Waterways Continuing Problem
WCP10
(a)
WATERWAYS CORPORATION
Manufacturing Overhead Flexible Budget
For the Month of March 2017
Production in units
115,500
116,500
117,500
118,500
119,500
Variable costs
Indirect materials ($.05/unit a)
$ 5,775
$ 5,825
$ 5,875
$ 5,925
$ 5,975
Maintenance ($.07/unit d)
8,085
8,155
8,225
8,295
8,365
Fixed Costs
Salaries
42,000
42,000
42,000
Depreciation
16,800
16,800
16,800
Property taxes
3,000
3,000
3,000
3,000
3,000
Insurance
1,200
1,200
1,200
Janitorial
1,500
1,500
1,500
Total budgeted costs
$104,110
$104,790
$105,130
Unit costs are based on the static budget costs.
a. $ 5,875/117,500 units = $0.05/unit
(b)
Budget
Actual
Difference
Favorable
Production in units
118,500
118,500
Unfavorable
Variable costs
Indirect materials
$ 5,925
$ 5,910
$15 F
Indirect labor
14,220
14,195
25 F
Utilities
11,850
11,880
30 U
Maintenance
8,295
8,275
20 F
Fixed Costs
Salaries
42,000
42,000
Depreciation
16,800
16,800
Property taxes
3,000
3,000
Insurance
1,200
1,200
Janitorial
1,500
Total budgeted costs
$104,790
$ 104,760
Indirect labor ($.12/unit b)
13,860
13,980
14,340
Utilities ($.10/unit c)
11,550
11,650
11,950
(c)
WATERWAYS CORPORATION
Responsibility Report
Manufacturing Overhead
For the Month of March 2017
Controllable Cost
Budget
Actual
Difference
Favorable
Unfavorable
Indirect materials
$ 5,925
$ 5,910
$15 F
Indirect labor
14,220
14,195
$25 F
Utilities
11,850
11,880
Maintenance
$40,290
$40,260