Question:
Preparing a performance report
Strand Manufacturing, Inc., has the following flexible budget formulas and amounts:
|
Sales
|
$ 25 per unit
|
|
Direct materials
|
5 per unit
|
|
Direct labor
|
3 per unit
|
|
Variable factory overhead
|
4 per unit
|
|
Variable selling and administrative expense
|
1 per unit
|
|
Fixed factory overhead
|
$25,000 per month
|
|
Fixed selling and administrative expense
|
$20,000 per month
|
Actual results for the month of May for the production and sale of 5,000 units were as follows:
|
Sales
|
$120,000
|
|
Direct materials
|
26,000
|
|
Direct labor
|
14,000
|
|
Variable factory overhead
|
25,500
|
|
Variable selling and admin
|
5,500
|
|
Fixed factory overhead
|
26,750
|
|
Fixed selling and admin
|
19,800
|
Prepare a performance report for the month of May that includes the identification of the favorable and unfavorable variances.