Question

Paynesville Corporation manufactures and sells a preservative used in food and drug manufacturing. The company carries no inventories. The master budget calls for the company to manufacture and sell 138,000 liters at a budgeted price of $360 per liter this year. The standard direct cost sheet for one liter of the preservative follows. points Direct materials Direct labor (2 pounds @ $23) (0.5 hours @ $62) $46 31 eBook Variable overhead is applied based on direct labor hours. The variable overhead rate is $210 per direct-labor hour. The fixed overhead rate (at the master budget level of activity) is $105 per unit. All non-manufacturing costs are fixed and are budgeted at $3.1 million for the coming year. Print At the end of the year, the costs analyst reported that the sales activity variance for the year was $1,068,000 unfavorable. References Required Prepare a flexible budget for Paynesville for the year. (Enter your answers in thousands of dollars.) PAYNESVILLE CORPORATION Flexible Budget (thousands of dollars) Variable costs: Total variable costs Fixed costs: Total fixed costs

Answer 1

Paynesvilee Corporation
Flexible Budget
( Thosand of Dollar)
Particular	Amount
Variable Cost
Direct material ( $46X 138000)	$6,348.00
Direct Labour ( $31*138000)	$4,278.00
Variable Overhead ( ( 0.5 HourX 138000 X210)	$14,490.00
Fixed Cost
Fixed Oerhead Cost ( 138000X105)	$14,490.00
Non-Manufacturing fixed Cost	$3,100.00
Total Cost	$42,706.00