B&L Landscapes, Inc. Mini Practice
Bill Graham and Larry Miller incorporated B&L Landscapes, Inc. on July 1, 2014. The business consists of lawn care and sprinkler system installations. In addition, they also sell two types of fertilizer.
During 2015, B&L Landscapes, Inc. acquired a 30% interest in Crestline Pipe. The president of Crestline wants to develop a management report to evaluate Manufacturing Overhead costs. Bill and Larry want to help and have volunteered your services to provide some managerial reporting for Crestline.
Crestline Pipe distributes high-quality PVC pipe and has the following information for the month of March, 2015.
| Crestline Pipe Manufacturing Overhead Budget (Static) For the Month of March, 2015 |
|
Budgeted production in LF Budgeted costs
|
117,500
|
|
Indirect materials ($0.30/DLH)
|
7,050
|
|
Indirect labor ($0.50/DLH)
|
11,750
|
|
Utilities ($0.40/DLH)
|
9,400
|
|
Maintenance ($0.25/DLH)
|
5,875
|
|
Salaries
|
42,000
|
|
Depreciation
|
16,800
|
|
Property taxes
|
2,500
|
|
Insurance
|
1,200
|
|
Janitorial
|
1,300
|
|
Total budgeted costs
|
$97,875
|
|
Crestline Pipe Manufacturing Overhead Costs (Actual) For the Month of March, 2015
|
|
Actual production in LF
|
118,500
|
|
Actual costs
Indirect materials)
|
7,100
|
|
Indirect labor
|
11,825
|
|
Utilities
|
10,700
|
|
Maintenance
|
5,900
|
|
Salaries
|
42,000
|
|
Depreciation
|
16,800
|
|
Property taxes
|
2,500
|
|
Insurance
|
1,200
|
|
Janitorial
|
1,300
|
|
Total budgeted costs
|
$99,325
|
Crestline Pipe had the following static budget and overhead costs for March. Manufacturing overhead is budgeted based on direct labor hours (DLH). Direct labor is budgeted at 12 minutes per linear foot (LF).
1. Prepare a flexible manufacturing overhead budget based on the following amounts produced.
a) 115,500 LF
b) 116,500 LF
c) 117,500 LF
d) 118,500 LF
e) 119,500 LF
2. Prepare a flexible budget report showing the differences (favorable and unfavorable) in manufacturing overhead costs for the month of March. Include your analysis of what variances should be investigated further.
3. Prepare a responsibility report for the manufacturing overhead for March, assuming only variable costs are controllable. Provide a brief evaluation of how this information could be used to measure the manufacturing manager's performance.
Attachment:- Assignment.rar