Solution Ex 1

FAGAN COMPANY
Manufacturing Overhead Budget Report (Flexible)
For the Month Ended August 31, 2008
Difference
Budget at Actual at Favorable F
3,000 hrs. 3,000 hrs. Unfavorable U
Variable costs
Indirect labor $15,000 $14,000 $1,000 F
Indirect materials 7,500 8,100 600 U
Maintenance 1,500 1,400 100 F
Utilities 900 950 50 U
Total variable 24,900 24,450 450 F
Fixed Costs
Supervision 600 720 120 U
Insurance 200 200 —
Property taxes 300 300 —
Depreciation 900 930 30 U
Total fixed 2,000 2,150 150 U
Total costs $26,900 $26,600 $ 300 F

Solution Ex 2
MOLLE COMPANY
Selling Expense Budget Report (Flexible)
For the Month Ended February 29, 2008

Difference
Favorable F
Budget Actual Unfavorable U
$220,000 $220,000
Variable expenses
Sales commissions $13,200 $13,700 $ 500 U
Advertising 8,800 8,000 800 F
Traveling 11,000 11,300 300 U
Delivery 2,200 1,600 600 F
Total variable 35,200 34,600 600 F
Fixed expenses
Sales salaries 40,000 41,000 1,000 U
Depreciation 10,000 10,000 —
Total fixed 50,000 51,000 1,000 U
Total expenses $85,200 $85,600 $ 400 U