Adrian power | Accounting homework help

Adrian Power manufactures small power supplies for car stereos. The company uses flexible budgeting techniques to deal with the seasonal and cyclical nature of the business. The accounting department provided the accompanying data on budgeted manufacturing costs for the month of January:

                                            ADRIAN POWER 

              Planned Level of Production for January

Budgeted Production (in units)                           14,000

Variable Cost (vary with production)

Direct Material                                                             $140,000

Direct Labor                                                                       224,000

Indirect Labor                                                                       21,000

Indirect Material                                                                10,500

Maintenance                                                                            6,300

Fixed cost

Supervision                                                                            24,700

Other (depreciation, taxes, ect.)                              83,000

Total plant cost                                                              $510,000


 Actual operations for January are summarized as 

                                               ADRIAN POWER

                                Actual Operations for January

Actual Production (in units)                                    15,400

Actual Cost incurred

Direct Material                                                             $142,400

Direct Labor                                                                       259,800

Indirect Labor                                                                       27,900

Indirect Material                                                                12,200

Maintenance                                                                            9,800

Supervision                                                                            28,000

Other (depreciation, taxes, ect.)                              83,500

Total plant cost                                                              $563,600



a. Prepare a report comparing the actual operating results with the flexible budget at actual production. b. Write a short memo analyzing the report prepared in part (a). What likely managerial implications do you draw from this report? What are the numbers telling you? 

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