Managerial Accounting
17th Edition
ISBN: 9781260247787
Author: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Publisher: RENT MCG
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Question
Chapter 9, Problem 17P
To determine
Introduction: The difference between the planning budget and the flexible budget is known as activity variance. It arises due to the difference between the planned activity level and the actual activity level.
To prepare: The production department's flexible budget performance report.
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Packaging Solutions Corporation manufactures and sells a wide variety of packaging products.
Performance reports are prepared monthly for each department. The planning budget and flexible
budget for the Production Department are based on the following formulas, where q is the number of
labor-hours worked in a month: cost formulas
Direct labor
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$16.20q
Indirect labor $4,600+ $1.50q
Utilities $5,200 + $0.40q
Supplies
Equipment depreciation
Factory rent $8,400
Property taxes $2,800
Factory administration $13,300 + $0.60q
The Production Department planned to work 4,000 labor-hours in March; however, it actually worked
3,800 labor-hours during the month. Its actual costs incurred in March are listed below:
Actual Cost Incurred in March
Direct labor $ 63,120
Indirect labor $9,780…
Flexible Budget Performance Reports; working Backwards
Ray company provided the following experts from its production departments flexible budget performance report:
Required:
Complete the Production Department’s Flexible Budget Performance Report by filling in all the question marks.
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Packaging Solutions Corporation manufactures and sells a wide variety of packaging products.
Performance reports are prepared monthly for each department. The planning budget and flexible
budget for the Production Department are based on the following formulas, where q is the number of
labor-hours worked in a month: cost formulas
Direct labor
$16.20q
Indirect labor $4,600+ $1.50q
Utilities $5,200 + $0.40q
Supplies
Equipment depreciation
$1,400 + $0.30q
Factory rent $8,400
Property taxes $2,800
Factory administration $13,300 + $0.60q
The Production Department planned to work 4,000 labor-hours in March; however, it actually worked
3,800 labor-hours during the month. Its actual costs incurred in March are listed below:
Actual Cost Incurred in March
Direct labor $ 63,120
Indirect labor $9,780
Utilities…
Chapter 9 Solutions
Managerial Accounting
Ch. 9 - Prob. 1QCh. 9 - What is a flexible budget and how does it differ...Ch. 9 - Prob. 3QCh. 9 - Why is it difficult to interpret a difference...Ch. 9 - What is an activity variance and what does it...Ch. 9 - Prob. 6QCh. 9 - Prob. 7QCh. 9 - Prob. 8QCh. 9 - Prob. 9QCh. 9 - Prob. 10Q
Ch. 9 - The Excel worksheet form that appears below is to...Ch. 9 - The Excel worksheet form that appears below is to...Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Prob. 2F15Ch. 9 - Prob. 3F15Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Adger Corporation is a service company that...Ch. 9 -
L09-1, LO9-2, LO9-3
Adger Corporation is a...Ch. 9 - Prob. 8F15Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Prob. 10F15Ch. 9 - Prob. 11F15Ch. 9 - Prob. 12F15Ch. 9 - Prob. 13F15Ch. 9 - Prob. 14F15Ch. 9 - Prob. 15F15Ch. 9 - Prob. 1ECh. 9 - Prob. 2ECh. 9 -
EXERCISE 9-3 Revenue and Spending Variances...Ch. 9 - Prob. 4ECh. 9 - Prob. 5ECh. 9 - Prob. 6ECh. 9 - Prob. 7ECh. 9 - Prob. 8ECh. 9 - Prob. 9ECh. 9 - Prob. 10ECh. 9 - Prob. 11ECh. 9 - Prob. 12ECh. 9 - Prob. 13ECh. 9 - Prob. 14ECh. 9 - Prob. 15ECh. 9 - Prob. 16ECh. 9 - Prob. 17PCh. 9 - Prob. 18PCh. 9 - Prob. 19PCh. 9 - Prob. 20PCh. 9 - Prob. 21PCh. 9 - Prob. 22PCh. 9 - Prob. 23PCh. 9 - Prob. 24CCh. 9 - Prob. 25CCh. 9 - Prob. 26C
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