Use the following information for "Mike's Water Fun" is available below:
Budgeted selling price is: $1,550
Budgeted production costs for one "Longboard" surfboard are as follows:
DM: Polyurethane blank core 1 @ $140 each
6 ounce fiberglass cloth 4 yards @ $4.00/sq. yd.
Resin 1.5 gallons @ $42/gallon
DL: 6 Hours @ $32/hr.
VMOH 6DLH @ $2/hr.
FMOH Budgeted at $163,800
Mike's Water Fun applies the FMOH using direct labor hours and the overhead rate is based on the budgeted production level.
Other costs are as budgeted as follows:
Shipping $40/surfboard
Fixed Selling and Admin costs (budgeted) $112,000
Budgeted production and sales for 2016 were 400 "Longboard" surfboards. This volume represents a projected 40% share of the total expected market in 2016 of 1000 professional shaped surfboards of similar type and quality in the California market.
The following actual results were recorded during 2016, for the "Longboard" surfboards:
Actual market size: 1,200 professional shaped surfboards
Actual production: 410 surfboards
Actual sales: 410 surfboards @ $1,565 per unit
Actual DM usage and cost:
425 polyurethane blank cores were purchased at a cost of $55,250. 418 blank cores were used in production
1,650 sq. yards of 6 ounce fiberglass cloth were purchased at a cost of $6,765. 1,599sq. yards were used in production.
650 gallons of resin were purchased for $29,900. 574 gallons of resin were used in production.
Actual DL hours worked 2,600 @ $30.75/hour
Actual VMOH: $5,460
Actual FMOH: $169,500
Actual shipping cost: $17,220
Actual selling and Admin cost: $115,000
Prepare a Flexible profit budget listing all revenues and costs for Mike's Water Fun in 2016?
Compute the sales price and sales volume variances based on selling price?
Compute the material price and usage variance for resin. The price variance should be calculated on the materials purchased?
Compute the direct labor rate and efficiency variances?
Calculate the fixed manufacturing overhead spending and production volume variances?