Flexible Budget Examples( Chapter 18)

  • Uploaded by: Muhammad azeem
  • 0
  • 0
  • June 2020
  • PDF

This document was uploaded by user and they confirmed that they have the permission to share it. If you are author or own the copyright of this book, please report to us by using this DMCA report form. Report DMCA


Overview

Download & View Flexible Budget Examples( Chapter 18) as PDF for free.

More details

  • Words: 597
  • Pages: 9
Solution of Problem No. 18-2

Level of Activitie Particulars Direct Labor hours

80% 40,000

Variable Expenses: 1 Shop supplies (0.10 per direct labor hours) 2 Indirect labor (0.45 per direct labor hours) 3 Payrol taxes &Fringe benefit (W-1)

4,000 18,000 57,240

4 Power and Light (W-2) 5 Inspection (W-3) 6 Other semi variable expenses (W-4) TOTAL VARIABLE EXPENSES

1,200 4,800 5,600 90,840

Fixed Expenses: 1 Depreciation Expenses 2 Insurance 3 Maintenance Cost 4 Property tax 5 Supervision Staff

9,000 1,500 24,000 1,500 36,000

6 Power and Light (W-2) 7 Inspection (W-3) 8 Other semi variable expenses (W-4) TOTAL FIXED EXPENSES TOTAL FACTORY OVERHEAD

200 4,200 1,900 78,300 169,140

WORKINGS W-1

Calculation of Payrol taxes & fringe benefit Amount of Direct Labor Cost = 50,000 hours x 7.50 Amount of Indirect Labor Cost = 50,000 hours x 0.45

375,000 22,500

Total amount of Payrol

397,500

Amount of tax (Rs. 397,500 x 18%) W-2

71,550

CALCULATION OF POWER & LIGHT Hours High Value Low Value

50,000 40,000 10,000

Difference in Value Variable per hour cost = Difference in Cost Difference in hours

300 10,000

Variable Cost per hour Total Amount of semi variable expenses Less: Variable portion (50,000 hours x 0.03) Fixed Portion

W- 3

=

0.03 1,700 (1,500) 200

CALCULATION OF INSPECTION: Hours High Value Low Value

50,000 40,000 10,000

Difference in Value Variable per unit cost = Difference in Cost Difference in hours

1,200 10,000

Variable Cost per unit = Total Amount of semi variable expenses Less: Variable portion (50,000 hours x 0.12) Fixed Portion

=

0.12 10,200 (6,000) 4,200

W- 4

CALCULATION OF OTHER SEMI VARIABLE EXPENSES Hours High Value Low Value

50,000 40,000 10,000

Difference in Value Variable per unit cost = Difference in Cost Difference in hours

1,400 10,000

Variable Cost per unit = Total Amount of semi variable expenses Less: Variable portion (50,000 hours x 0.14) Fixed Portion

=

0.14 8,900 (7,000) 1,900

Level of Activities 90%

100%

45,000

50,000

4,500 20,250 64,395

5,000 22,500 71,550

1,350 5,400 6,300 102,195

1,500 6,000 7,000 113,550

9,000 1,500 24,000 1,500 36,000

9,000 1,500 24,000 1,500 36,000

200 4,200 1,900

200 4,200 1,900

78,300

78,300

180,495

191,850

Cost 1,700 1,400 300

Cost 10,200 9,000 1,200

Cost 8,900 7,500 1,400

Solution of Exercise No 4 60% Level 2,280

75%Level 2,850

100% level 3,800

1,920

2,400

3,200

Direct Material Direct Labour Fixed factory overhead Supplies (0.23/hour) Indirect Labour (1/8 of D/L) Other Charges (0.18 / hour)

2,856 17,280 670 442 2,160 346

3,570 21,600 670 552 2,700 432

4,760 28,800 670 736 3,600 576

Total Cost

23,753

29,524

39,142

Units produced Direct Labour hours

20 workers x 8 hours x 20 days

Required No. 1: Capacities Direct Labour hours

Variable Cost Utilities Maintenance Other Factory overhead Indirect Labour

80%

90%

100%

110%

24,000

27,000

30,000

33,000

28,800 38,400 19,200 16,800

32,400 43,200 21,600 18,900

36,000 48,000 24,000 21,000

39,600 52,800 26,400 23,100

Total Variable Cost

103,200

116,100

129,000

141,900

Fixed Cost Maintenance Indirect Labour Depreciation

40,000 130,000 90,000

40,000 130,000 90,000

40,000 130,000 90,000

40,000 130,000 90,000

Total Fixed Cost

260,000

260,000

260,000

260,000

Total Factory Overhead Cost

363,200

376,100

389,000

401,900

Required No. 2 Comparative Performance Report Capacities Direct Labour hours

Variable Cost Utilities Maintenance Other Factory overhead Indirect Labour

80%

Actual

Variance

24,000

24,000

Nil

28,800 38,400 19,200 16,800

24,200 38,100 8,400 19,600

4,600 U 300 F 10,800 U (2,800) U

Total Variable Cost

103,200

90,300

12,900 U

Fixed Cost Maintenance Indirect Labour Depreciation

40,000 130,000 90,000

40,000 130,000 91,500

(1,500) F

Total Fixed Cost

260,000

261,500

(1,500)

Total Factory Overhead Cost

363,200

351,800

11,400 U

Related Documents

Chapter 2 Examples
May 2020 6
Chapter 1 Examples
May 2020 5
Chapter 3 Examples
May 2020 5
Chapter 18
November 2019 29
Chapter 18
October 2019 23

More Documents from ""