The following data relate to R.M. Williams’ operations for the month of July.

Actual number of activity drivers:

Machine hours ………………………………………………… 200

Number of material moves ……………………………………. 280

Production batches …………………………………………….. 60

Inspections ……………………………………………………… 40

Products under development ……………………………………. 2

Actual cots:

Machine-level activities …………………………………….. $ 15 000

Material handling ………………………………………………. 4 000

Set-up machines ………………………………………………… 4 030

Quality control ………………………………………………… 3 200

Product development activities ……………………………….. 1 800

Council rates …………………………………………………… 550

Clearing costs ………………………………………………… 1 800

Insurance ……………………………………………………….. 800

Required:

1. Use the actual number of activity drivers and the standard cost per activity driver from Exhibit 11.12 to construct an activity-based flexible budget for July. Assume that the budgeted costs of facility-level activities for September in Exhibit 11.12 also apply to July. Did P.M. Williams spend more or less than they should have on manufacturing overheads in July?

2. Recalculate your flexible budget for July assuming that the actual number of machine hours was 220 and the actual number of material moves was 150. What is the new total cost for the activity-based flexible budget for July?



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