Ma610 Managerial Accounting

Managerial Accounting: Budgets and Variance AnalysisACTIVITY 4Managerial AccountingLesson 4: Budgets and Variance AnalysisActivity 4: Budgeting (100 Points)Part A (50 points)Complete Problem 8-44 (p. 341) on the Lucerne Chocolate Company. (A 1½-page response is required.)Flexible Budget:Standard Input Quantities Cost Incurred:Allowed for Outputs Actual Inputs ×Actual Input QuantitiesAchieved ×Actual Prices× Standard PricesStandard PricesDirect Materials:3,400 lbs. × 17.3CHF3,400 lbs × 18CHF2,900 lbs. × 18CHF=58,820CHF= 61,200CHF= 52,200CHF3,400 × .7CHF= Price variance,500 × 18CHF = Quantity variance,2,380CHF F9,000CHF UFlexible-budget variance, 6,620 CHF UexDirect Labor:3,925 hrs. × 38.6CHF3,925 hrs. × 38CHF3,625 hrs. × 38CHF= 151,505CHF= 149,150CHF= 137,750CHF3,925 × .6CHF300 × 38CHF= Price variance,Quantity variance,2,355CHF U11,400CHF UFlexible-budget variance, 13,755 CHF UManufacturing Overhead:PredictedFlexible Budget:Overhead BasedStandard Driver Use on ActualAllowed for Outputs Actual OverheadDriver UseAchieved ×Costs Incurred× Standard PricesStandard Prices3,925 hrs. × 11CHF3,625 hrs. × 11CHF46,675CHF= 43,175CHF= 39,875CHFSpending variance, 46,675 – 43,175 = 3,500CHF U300 × 11CHF= Efficiency variance,3,300CHF UFlexible-budget variance, 6,800CHF UThe flexible-budget allowance for any