Exercise 13-2

Name: Aubrey Ehn

Section: Accounting and Finance for Managers

Score: 100%

Key Code: 2
Instructions

Answers are entered in the cells with gray backgrounds.

Cells with non-gray backgrounds are protected and cannot be edited.
A red asterisk (*) will appear in the row immediately to the right of an incorrect answer.

a.
LEI COMPANY—MACHINING DEPARTMENT
Flexible Production Budget
For the Three Months Ending March 31
January February March

Units of production 75,000 85,000 90,000

Wages $ 1,080,000 $ 1,224,000 $ 1,296,000

Utilities 69,000 78,200 82,800
Depreciation 32,500 32,500 32,500
Total $ 1,181,500 $ 1,334,700 $ 1,411,300

b. January February March

Total actual cost $ 1,200,000 $ 1,356,000 $ 1,425,000

Total flexible budget (1,181,500) (1,334,700) (1,411,300)
Excess of actual cost over budget $ 18,500 $ 21,300 $ 13,700

Comment:
The Machining Department is spending more than expected, and it’s getting worse each month.
nth.