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  • Flexible Budget Example

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    Val Pineda
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    The flexible budget for Black Inc. for the year ending December 31, 2022 estimates total costs of PHP 142,500, including fixed costs of PHP 120,000 and variable costs of PHP 22,500 based on 15,000 direct labor hours at a cost of PHP 1.50 per hour. The static budget for VP Corp for January 2022 budgets production of 10,000 units with total variable overhead costs of PHP 8,000 budgeted for indirect materials, gasoline, and electricity. The actual results for VP Corp for January 2022 show unfavorable variances compared to budget for total production and costs. Total variable overhead costs were PHP 15,300 actual versus PHP 16,000 budgeted.

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    The flexible budget for Black Inc. for the year ending December 31, 2022 estimates total costs of PHP 142,500, including fixed costs of PHP 120,000 and variable costs of PHP 22,500 based on 15,000 direct labor hours at a cost of PHP 1.50 per hour. The static budget for VP Corp for January 2022 budgets production of 10,000 units with total variable overhead costs of PHP 8,000 budgeted for indirect materials, gasoline, and electricity. The actual results for VP Corp for January 2022 show unfavorable variances compared to budget for total production and costs. Total variable overhead costs were PHP 15,300 actual versus PHP 16,000 budgeted.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    3 views4 pages

    Flexible Budget Example

    Uploaded by

    Val Pineda
    The flexible budget for Black Inc. for the year ending December 31, 2022 estimates total costs of PHP 142,500, including fixed costs of PHP 120,000 and variable costs of PHP 22,500 based on 15,000 direct labor hours at a cost of PHP 1.50 per hour. The static budget for VP Corp for January 2022 budgets production of 10,000 units with total variable overhead costs of PHP 8,000 budgeted for indirect materials, gasoline, and electricity. The actual results for VP Corp for January 2022 show unfavorable variances compared to budget for total production and costs. Total variable overhead costs were PHP 15,300 actual versus PHP 16,000 budgeted.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 4

    Black Inc.

    Flexible Budget
    For the Year Ending December 31, 2022

    Fixed Costs PHP 120,000.00


    Variable Costs
    Direct Labor Hours 15,000.00
    Multiply: Variable Costs per UA PHP 1.50 PHP 22,500.00
    Total Costs PHP 142,500.00
    VP Corp
    Static Budget
    For the Month Ending January 31, 2022

    Budget Production 10,000.00

    Budgeted Variable Overhead Costs


    Indirect Materials 4,000.00
    Gasoline 1,000.00
    Electricity 3,000.00
    Total 8,000.00

    VP Corp
    Static Budget
    For the Month Ending January 31, 2022

    Actual Budget Variance


    Production in Units 18,800.00 20,000.00 1,200.00 Unfavorable

    Variable Overhead Costs


    Indirect Materials 7,600.00 8,000.00 400.00 Favorable
    Gasoline 1,900.00 2,000.00 100.00 Favorable
    Electricity 5,800.00 6,000.00 200.00 Favorable
    Total 15,300.00 16,000.00 700.00 Favorable
    VP Corp
    Flexible Budget
    For the Month Ending January 31, 2022

    Cost/Unit Actual Budget Variance


    Production in Units 18,800.00 18,800.00 -

    Variable Overhead Costs


    Indirect Materials 0.40 7,600.00 7,520.00 (80.00) Unfavorable
    Gasoline 0.10 1,900.00 1,880.00 (20.00) Unfavorable
    Electricity 0.30 5,800.00 5,640.00 (160.00) Unfavorable
    Total 15,300.00 15,040.00 (260.00) Unfavorable

    Unfavorable
    Unfavorable
    Unfavorable
    Unfavorable
    Unfavorable

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