24-1
SOLUTION
Chapter 24 Waterways Continuing Problem
WCP 24
(a)
Waterways Corporation
Manufacturing Overhead Flexible Budget
For the Month of March
Production in units
115,500
116,500
117,500
118,500
119,500
Variable costs
Indirect materials($.06/unit a)
$ 6,930
$ 6,990
$ 7,050
$ 7,110
$ 7,170
Indirect labor ($.10/unit b)
11,550
11,650
11,750
11,850
11,950
Unit costs are based on the static budget costs.
a. $7,050 / 117,500 units = $0.06 / unit
Maintenance ($.05/unit d)
5,775
5,875
5,925
5,975
Total Variable Costs
34,650
34,950
35,250
35,550
35,850
Fixed Costs
Salaries
42,000
42,000
42,000
42,000
42,000
Depreciation
16,800
16,800
16,800
16,800
16,800
Property taxes
2,500
2,500
2,500
2,500
2,500
Insurance
1,200
1,200
1,200
1,200
1,200
Janitorial
1,300
1,300
1,300
1,300
1,300
Total Fixed Costs
63,800
63,800
63,800
63,800
63,800
Total budgeted costs
$ 98,450
$ 98,750
$ 99,050
$99,350
$ 99,650
24-2
(b)
Budget
Actual
Difference
Favorable
Production in units
118,500
118,500
Unfavorable
Variable costs
Indirect materials
$ 7,110
$ 7,100
$ 10 F
Indirect labor
11,850
11,825
25 F
Utilities
10,665
10,700
35 U
(c)
Waterways Corporation
Responsibility Report
Manufacturing Overhead
For the Month of March
Controllable Cost
Budget
Actual
Difference
Favorable
Unfavorable
Indirect materials
$ 7,110
$ 7,100
$ 10 F
Indirect labor
$ 25 F
Utilities
Maintenance
$ 25 F
$ 35,550
$ 35,525
$ 25 F
Maintenance
5,925
5,900
25 F
Total Variable Costs
35,550
35,525
25 F
Fixed Costs
Salaries
42,000
42,000
Depreciation
16,800
16,800
Property taxes
2,500
2,500
Insurance
1,200
1,200
Janitorial
1,300
1,300
0
Total Fixed Costs
63,800
63,800
0
Total budgeted costs
$ 99,350
$ 99,325
$ 25 F