Flexible Budget
In an attempt to improve budgeting, the controller for Meliore,Inc., has developed a flexible budget for overhead costs. Meliore,Inc., makes two types of products, the standard model and thedeluxe model. Meliore expects to produce 300,000 units of thestandard model and 120,000 units of the deluxe model during thecoming year. The standard model requires 0.05 direct labor hour perunit, and the deluxe model requires 0.08. The controller hasdeveloped the following cost formulas for each of the four overheaditems:
| CostFormula |
| Maintenance | $34,600 + $1.25 DLH |
| Power | $0.50 DLH |
| Indirect labor | $68,200 + $2.30 DLH |
| Rent | $31,700 |
At the end of the year, Meliore, Inc., actually produced 310,000units of the standard model and 115,000 of the deluxe model. Theactual overhead costs incurred were:
| Maintenance | $ 64,200 |
| Power | 12,410 |
| Indirect labor | 129,160 |
| Rent | 31,700 |
Required:
Prepare a performance report for the period. If there is novariance, enter "0" for the amount and select "NA" in the lastcolumn.
| Meliore, Inc. |
| Performance Report |
| For the Year Ended December 31 |
| Actual | Budget | Variance | Fav/Unfav/NA |
| DLH for units produced | | | | |
| Production costs: | | | | |
| Maintenance | $ | $ | $ | |
| Power | | | | |
| Indirect labor | | | | |
| Rent | | | | |
| Total | $ | $ | $ | |
