Prepare a flexible budget for the actual units produced

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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.

Reference no: EM133075539

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