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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The solution explains the use of flexible budget in performance evaluation
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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 ...
Purchase this Solution
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