ACC 406 Lecture Notes - Lecture 10: Stabilisation Force In Bosnia And Herzegovina, Purchase Order
17 Apr 2016
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Chapter 11 flexible budgets and overhead analysis. Performance report compares direct materials, direct labour, and overhead costs budgeted for the planned level of activity with actual costs for the actual level of activity. Actual and expected costs must be compared at the same level of activity. Preparing a static budget: prepare a performance report using a budget based on expected production. In the preceding example, there were unfavourable variances for direct materials, direct labour, maintenance, and power. However, there is something fundamentally wrong with the report. Actual costs for production of 1,200 pairs of shorts are being compared with planned costs for production of 1,060. To create a meaningful performance report, actual costs and expected costs must be compared at the same level of activity. Materials (1 plain pr. shorts @ . 00 and. Variable overhead: maintenance: 0. 12 hours @ . 75 per hour, power: 0. 12 hours @ . 25 per hour.
