Question

Jim’s Landscaping is in a business of maintaining and improving yards in the surrounding areas. The company bases its overhead cost budgets on the following data: Variable overhead costs: Supplies $4 per yard Machine maintenance $2 per yard Chemicals $6 per yard Fixed Overhead: Salaries and wages $2,300 per month Depreciation $800 per month Utilities $400 per month Rent $1,100 per month In June the following actual costs were incurred for 83 yards: Supplies $320 Machine maintenance $180 Chemicals $500 Salaries and wages $2,500 Depreciation $800 Utilities $450 Rent $1,100 Construct a flexible budget performance report using the data provided: Show computations

Answer 1

Jim's Landscaping is the business of maintaining and improving yards in surrounding areas. The company bases its overhead cost budgets on the following data
Variable overhead costs:
Supplies $4 per yard
Machine maintenance $2 per yard
Chemicals $6 per yard

Fixed overhead costs:
Salaries and wages $2300 per month
Machine maintenance $800 per month
Utilities $400 per month
Rent $1100 per month

In June, the following actual costs were incurred for 83 yards:
Supplies $320
Machine maintenance $180
Chemicals $500
Salaries and wages $2500
Depreciation $800
Utilities $450
Rent $1100

Answer 2

Variable cost per unit

12





















Fixed overhead cost















Salaries and wages

2300





Machine maintenance

800





Utilities

400





Rent

1100





Total

4600





















So overhead applied







Variable = 83*12

996





Fixed

4600





Total overhead applied

5596













Actual cost incurred







Supplies

320





Machine maintenance

180





Chemicals

500





Salaries and wages

2500





Depreciation

800





Utilities

450





Rent

1100





Actual cost incurred

5850