Prepare a performance report for the north plant include a

Question

Reuse Products, LLC, manufactures plastic beverage bottles. The division that man- ufactures water bottles for the North American market has two plants that operate 24 hours a day, 365 days a year. The plants are evaluated as cost centers. Small tools and supplies are considered variable overhead. Depreciation and rent are considered fixed overhead. For the month, the master budget for a plant and the actual operating results of the two North American plants, North and South, follow.

Cost Category (Variable Unit Cost)	Master Budget	north Actual	south Actual
Center costs:
Plastic pellets ($0.009)	$4,500,000	$3,880,000	$5,500,000
Caps ($0.004)	2,000,000	1,990,000	2,000,000
Direct labor ($0.002)	1,000,000	865,000	1,240,000
Small tools and supplies ($0.0005)	250,000	198,000	280,000
Depreciation and rent	450,000	440,000	480,000
Total cost	$8,200,000	$7,373,000	$9,500,000
Performance measures:
Bottles processed per hour	69,450	62,000	70,250
Average daily pounds of scrap	5	6	7
Bottles processed (in millions)	500	450	520

Required:

1. Prepare a performance report for the North plant. Include a flexible budget and variance analysis.

2. Prepare a performance report for the South plant. Include a flexible budget and variance analysis.

3. Compare the two plants, and comment on their performance.

4. Explain why a flexible budget should be prepared.

Answer 1

Need to get ready an assignment that is must to show in your daily test of examination so read all questions and give answer as needed Reuse Products, LLC, produces plastic beverage bottles. The division that manufactures water bottles for the North American market has two plants that operate 24 hours a day, 365 days a year. The plants are estimated as cost centers. Small tools and supplies are believed variable overhead. Depreciation and rent are considered fixed overhead. For the month, the master budget for a plant and the actual operating results of the 2 North American plants, North and South, follow. Required: 1. Arrange a performance report for the North plant. Comprise a flexible budget and variance analysis. 2. Get ready a performance report for the South plant. Comprise a flexible budget and variance analysis. 3. Evaluate the two plants, and comment on their performance. 4. Clarify why a flexible budget must be prepared.