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1. Manufacturing Cost Accounting Superfactory Excellence Program™ www.superfactory.com

3. Product Costs - A Closer Look Costs associated with the goods that are completed during the period are transferred to finished goods inventory.

4. The Contribution Format The contribution margin format emphasizes cost behavior. Contribution margin covers fixed costs and provides for income.

6. The Master Budget Direct Materials Budget Ending Inventory Budget Production Budget Selling and Administrative Budget Direct Labor Budget Manufacturing Overhead Budget Cash Budget Budgeted Financial Statements Sales Budget

7. The Direct Materials Budget

8. Labor Variances Summary Actual Hours Actual Hours Standard Hours × × × Actual Rate Standard Rate Standard Rate Rate variance $310 unfavorable Efficiency variance $300 unfavorable 1,550 hours 1,550 hours 1,500 hours × × × $6.20 per hour $6.00 per hour $6.00 per hour = $9,610 = $9,300 = $9,000

9. Flexible Budget Performance Report CheeseCo Cost Total Formula Fixed Flexible Actual Per Hour Costs Budget Results Variances Machine hours 8,000 8,000 0 Variable costs Indirect labor 4.00 $ 32,000 $ 34,000 $ $ 2,000 U Indirect material 3.00 24,000 25,500 1,500 U Power 0.50 4,000 3,800 200 F Total variable costs 7.50 $ 60,000 $ 63,300 $ $ 3,300 U Fixed Expenses Depreciation 12,000 $ 12,000 $ 12,000 $ 0 Insurance 2,000 2,000 2,050 50 U Total fixed costs 14,000 $ 14,050 $ 50 U Total overhead costs 74,000 $ 77,350 $ $ 3,350 U