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    Flexible Budget

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    The budgeted prices for materials and direct labor per unit of finished product are $11 and $55, respectively. The production manager is delighted about the following data:

    The budgeted prices for materials and direct labor per unit of finished product are $11 and $55, respectively. The production manager is delighted about the following data:
    Static Budget Actual Costs Variance
    Direct materials 77,000 72,000 5,000
    Direct Labor 35,000 32,000 2,400

    Is the manager's happiness justified? Prepare a report that might provide a more detailed explanation of why the static budget was not achieved. Good output was $5,800 units.

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    https://brainmass.com/business/cash-budgeting/flexible-budget-199191

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    The budgeted prices for materials and direct labor per unit of finished product are $11 and $5, respectively. The production manager is delighted about the following data:

    Static Budget Actual Costs Variance
    Direct materials 77,000 72,000 5,000
    Direct Labor 35,000 32,000 2,400

    Is the manager's happiness ...

    Solution Summary

    The solution explains the use of flexible budget in performance evaluation

    $2.19

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