In Rooney Company, direct labor is $20 per hour. The company expects to operate S at 10,000 direct labor hours each month. In January 2017, direct labor totaling $206,000 b is incurred in working 10,400 hours. Prepare (a) a static budget report and (b) a flexible P budget report. Evaluate the usefulness of each repor.

Answer and Explanation:

The preparation is presented below;

a. For a static budget report

Product line      Budget                   Actual           Difference

Direct labor      $200,000              $206,000        $6,000 unfavorable

    (10,000 direct labor hours × $20 per hour)

It is unfavorable as the budget is less than the actual

b. For a flexible budget report

Product line      Budget                   Actual           Difference

Direct labor      $208,000              $206,000        $2,000 favorable

    (10,400 direct labor hours × $20 per hour)

It is favorable as the budget is more than the actual

the answer is 4 : )

hope i out!

answer(d) all of the choices are correct;