Reference no: EM133075539
Question - The production supervisor of the Painting Department for Whitley Company agreed to the following monthly static budget for the upcoming year:
WHITLEY COMPANY Painting Department Monthly Production Budget
Wages $720,000
Utilities 46,000
Depreciation 16,250
Total $782,250
The actual amount spent and the actual units produced in the first three months in the Painting Department were as follows:
|
|
Amount Spent
|
Units Produced
|
|
January
|
$600,000
|
37,500
|
|
February
|
678,000
|
42,500
|
|
March
|
712,500
|
45,000
|
The Painting Department supervisor has been very pleased with this performance, since actual expenditures have been less than the monthly budget. However, the plant manager believes that the budget should not remain fixed for every month but should "flex" or adjust to the volume of work that is produced in the Painting Department. Additional budget information for the Painting Department is as follows:
Wages per hour $18.00
Utility cost per direct labor hour $1.15
Direct labor hours per unit 0.80 hrs.
Planned unit production 50,000 units
Required - Prepare a flexible budget for the actual units produced for January, February, and March in the Painting Department. Assume depreciation is a fixed cost. Enter all amounts as positive numbers.