### Brief Exercise 22-5

Gundy Company expects to produce 1,220,400 units of Product XX in 2017. Monthly production is expected to range from 73,100 to 114,700 units. Budgeted variable manufacturing costs per unit are: direct materials \$4, direct labor \$7, and overhead \$9. Budgeted fixed manufacturing costs per unit for depreciation are \$5 and for supervision are \$3.

In March 2017, the company incurs the following costs in producing 93,900 units: direct materials \$399,600, direct labor \$651,300, and variable overhead \$849,100. Actual fixed costs were equal to budgeted fixed costs.

Prepare a flexible budget report for March. (List variable costs before fixed costs.)

Were costs controlled?

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### Brief Exercise 22-1

For the quarter ended March 31, 2017, Croix Company accumulates the following sales data for its newest guitar, The Edge: \$311,600 budget; \$326,900 actual.

Prepare a static budget report for the quarter.

 CROIX COMPANYSales Budget ReportFor the Quarter Ended March 31, 2017 Product Line Budget Actual Difference Guitar: The Edge \$ \$ \$ FavorableUnfavorableNeither Favorable nor Unfavorable
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### Do It! Review 22-1

Wade Company estimates that it will produce 6,500 units of product IOA during the current month. Budgeted variable manufacturing costs per unit are direct materials \$7, direct labor \$13, and overhead \$19. Monthly budgeted fixed manufacturing overhead costs are \$8,200 for depreciation and \$3,500 for supervision.

In the current month, Wade actually produced 7,000 units and incurred the following costs: direct materials \$42,700, direct labor \$82,800, variable overhead \$132,200, depreciation \$8,200, and supervision \$3,720.

Prepare a static budget report. Hint: The Budget column is based on estimated production while the Actual column is the actual cost incurred during the period. (List variable costs before fixed costs.)