Hill company uses budgets in controlling costs.

P24-3A Hill Company uses budgets in controlling costs. The August 2014 budget report for the company’s Assembling Department is as follows.

HILL COMPANY
Budget Report
Assembling Department
For the Month Ended August 31, 2014

         

Difference


Manufacturing Costs


Budget


Actual

Favorable (F)
Unfavorable (U)

Variable costs

               

   Direct materials

$54,000

 

$53,000

   

$1,000

F

 

   Direct labor

55,800

 

52,710

   

3,090

F

 

   Indirect materials

28,800

 

28,940

   

140

U

 

   Indirect labor

19,800

 

19,330

   

470

F

 

   Utilities

18,000

 

17,810

   

190

F

 

   Maintenance

13,800

 

14,160

   

360

U

 

      Total variable

190,200

 

185,950

   

4,250

F

 

Fixed costs

               

   Rent

10,860

 

10,860

   

–0–

   

   Supervision

18,100

 

18,100

   

–0–

   

   Depreciation

7,520

 

7,520

   

–0–

   

      Total fixed

36,480

 

36,480

   

–0–

   

Total costs

$226,680

 

$222,430

   

$4,250

F

 

 

The monthly budget amounts in the report were based on an expected production of 60,000 units per month or 720,000 units per year. The Assembling Department manager is pleased with the report and expects a raise, or at least praise for a job well done. The company president, however, is unhappy with the results for August because only 58,000 units were produced.

 

State the total monthly budgeted cost formula. (Round variable cost per unit to 2 decimal places, e.g. 1.55.)

Prepare a budget report for August using flexible budget data. (List variable costs before fixed costs. If answer is zero, please enter 0, do not leave any fields blank.)

In September, 64,000 units were produced. Prepare the budget report using flexible budget data, assuming (1) each variable cost was 10% higher than its actual cost in August, and (2) fixed costs were the same in September as in August. (List variable costs before fixed costs. If answer is zero, please enter 0, do not leave any fields blank.)

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