31. Dukane Company expects to produce 1,200,000 units of Product XX in 2009. Monthly production is expected to range from 80,000 to 120,000 units. Budgeted variable manufacturing costs per unit are: direct materials $4, direct labour $6, and overhead $8. Budgeted fixed manufacturing costs per unit for amortization are $2 and for supervision are $1. In March 2009, the company incurs the following costs in producing 100,000 units: direct materials $425,000, direct labour $590,000, and variable overhead $805,000. Prepare a flexible budget report for March. (If answer is zero, please enter 0, do not leave any fields blank.)

DUKANE COMPANY

Manufacturing Flexible Budget Report

For the Month Ended March 31, 2009

Budget

Actual

Difference

Favourable F

Units produced

100000

100000

Unfavourable U

Variable costs

Direct materials

$

400000

$

425000

$

25000

U

Direct labour

600000

590000

10000

F

Overhead

800000

805000

5000

U

Total variable costs

$

1800000

$

1820000

$

20000

U

Fixed costs

Amortization

200000

200000

0

Supervision

100000

100000

0

Total fixed costs

300000

300000

0

Total costs

$

2100000

$

2120000

$

20000

U

Were costs controlled?

32. For its three investment centres, Stahl Company accumulates the following data:

I

II

III

Sales

$2,000,000

$3,000,000

$4,000,000

Controllable margin

1,200,000

2,000,000

3,200,000

Average operating assets

5,000,000

8,000,000

10,000,000

The centres expect the following changes in the next year: (I) increase sales 15%; (II) decrease costs $200,000; (III) decrease average operating assets $400,000. Calculate the expected return on investment (ROI) for each centre. Assume centre I has a contribution margin percentage of 75%. (Round your answers to 1 decimal place.)

Centre I:

28.5

%

Centre II:

27.5

%

Centre III:

33.3

%

33. Presented below is information related to the Prince George Division of Cut Wood, Inc.

Contribution margin

$1,200,000

Controllable margin

$800,000

Average operating assets

$3,200,000

Minimum rate of return

16%

Calculate the division's return on investment and residual income. (Round your answers to 0 decimal places.)

Return on investment

25

%

Residual income $

288000

34.Alcore Company estimates that 240,000 direct labour hours will be worked during 2009 in the assembly department. On this basis, the following budgeted manufacturing overhead data are calculated.

Variable Overhead Costs

Fixed Overhead Costs

Indirect labour

$ 72,000

Supervision

$ 72,000

Indirect materials

48,000

Amortization

36,000

Repairs

24,000

Insurance

12,000

Utilities

50,400

Rent

9,000

Lubricants

9,600

Property taxes

6,000

$204,000

$135,000

It is estimated that direct labour hours worked each month will range from 18,000 to 24,000 hours.

During January, 20,000 direct labour hours were worked and the following overhead costs were incurred.

Variable Overhead Costs

Fixed Overhead Costs

Indirect labour

$ 6,200

Supervision

$ 6,000

Indirect materials

3,600

Amortization

3,000

Repairs

1,600

Insurance

1,000

Utilities

3,300

Rent

800

Lubricants

830

Property taxes

500

$15,530

$11,300

(a) Complete a monthly flexible manufacturing overhead budget for each increment of 2,000 direct labour hours over the relevant range for the year ending December 31, 2009.

ALCORE COMPANY

Monthly Flexible Manufacturing Overhead Budget

Assembly Department

For the Year 2009

Activity level

Direct labour hours

18,000

20,000

22,000

24,000

Variable costs

Indirect labour

$

5400

$

6000

$

6600

$

7200

Indirect materials

3600

4000

4400

4800

Repair

1800

2000

2200

2400

Utilities

3780

4200

4620

5040

Lubricants

720

800

880

960

Total variable

15300

17000

18700

20400

Fixed costs

Supervision

6000

6000

6000

6000

Amortization

3000

3000

3000

3000

Insurance

1000

1000

1000

1000

Rent

750

750

750

750

Property taxes

500

500

500

500

Total fixed

11250

11250

11250

11250

Total costs

$

26550

$

28250

$

29950

$

31650

(b) Complete a manufacturing overhead budget report for January. (If a box should be blank enter a 0, note all boxes must be filled to be correct.)

ALCORE COMPANY

Manufacturing Overhead Budget Report (Flexible)

Assembly Department

For the Month Ended January 31, 2009

Difference

Favourable

F

Budget at

Actual Costs

Unfavourable

U

Direct labour hours (DLH)

20,000 DLH

20,000 DLH

No Difference

N/A

Variable costs

Indirect labour

$

6000

$

6200

$

200

U

Indirect materials

4000

3600

400

F

Repair

2000

1600

400

F

Utilities

4200

3300

900

F

Lubricants

800

830

30

U

Total variable

17000

15530

1470

F

Fixed costs

Supervision

6000

6000

0

N/A

Amortization

3000

3000

0

N/A

Insurance

1000

1000

0

N/A

Rent

750

800

50

U

Property taxes

500

500

0

N/A

Total fixed

11250

11300

50

U

Total costs

$

28250

$

26830

$

1420

F

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