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# Flexible budgeting for Rockey Mountain Manufacturing

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Rocky Mountain Manufacturing produces a single product. The original budget for November was based on expected production of 16,700 units; actual production for November was 14,362 units. The original budget and actual costs incurred for the manufacturing department follow:

Original Budget Actual Costs
Direct materials \$ 250,500 \$ 224,063
Direct labor 200,400 176,476
Variable overhead 116,900 96,075
Fixed overhead 85,400 86,711

Total \$ 653,200 \$ 583,325

Required:
Prepare an appropriate performance report for the manufacturing department. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations and round final answers to nearest whole dollar amount. Omit the "\$" sign in your response.)

ItemOriginal Budget Flexed Budget
(16,700 units) (14,362 units) Actual Cost Variance
Direct Materials \$ \$ \$ \$
Direct Labor
Total \$ \$ \$ \$

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#### Solution Summary

The expert examines flexible budgeting for Rockey Mountain Manufacturing.

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## Rocky Mountain Manufacturing: Flexible Budgeting

Exercise 15.2 Flexible budgeting

Rocky Mountain Manufacturing produces a single product.
The original budget for November was based on expected production of 35,000 units; actual production for November was 33,250 units. The original budget and actual costs incurred for the manufacturing department follow:

Original Budget Actual Costs

Direct materials . . . . . . . . . . . . . . . . \$ 551,250 .......\$ 541,500
Direct labor . . . . . . . . . . . . . . . . . . . 427,000............ 413,500
Variable overhead . . . . . . . . . . . . . . 217,000............ 195,250
Fixed overhead . . . . . . . . . . . . . . . . 170,000 .....................172,500
Total. . . . . . . . . . . . . . . . . . . . . . . \$1,365,250 .......\$1,322,750

Required:
Prepare an appropriate performance report for the manufacturing department.

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