10 Nov Exercise 9-5A Evaluating a cost center including f
Exercise 9-5A Evaluating a cost center including flexible budgeting concepts Muskrat Medical Equipment Company makes a blood pressure measuring kit. Jason McCoy is the production manager. The production department s static budget and actual results for 2019 follow: Static Budget Actual Results Production in units 60,000 kits64,000 kits Direct materials.. $ 525,000. $ 655,000 Direct labor 450,000 464,000 Variable manufacturing overhead.. 120,000135,000 Total variable costs.. 1,095,000 1,254,000 Fixed manufacturing overhead.. 525,000 512,500 Total manufacturing cost.. $1,620,000. $1,766,500 Required a. Convert the static budget into a flexible budget. b. Use the flexible budget to evaluate Mr. McCoy s performance. c. Explain why Mr. McCoy s performance evaluation does not include sales revenue and net income.
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