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
100000

Units produced
Variable costs
Direct materials
Direct labour

Overhead
$

Total variable costs

Fixed costs
Amortization

400000

100000

425000

Difference
Favourable F
Unfavourable U
$

25000

600000

590000

10000

800000

805000

5000

1800000

1820000

20000

200000

200000

Supervision

100000

100000

Total fixed costs

300000

300000

Total costs

2100000

2120000

20000

Were costs controlled?

32. For its three investment centres, Stahl Company accumulates the following data:
I
Sales
$2,000,000
Controllable margin
1,200,000
Average operating assets 5,000,000

II
$3,000,000
2,000,000
8,000,000

III
$4,000,000
3,200,000
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
Controllable margin
Average operating assets
Minimum rate of return

$1,200,000
$800,000
$3,200,000
16%

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

25

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
Indirect labour
$ 72,000
Indirect materials
48,000
Repairs
24,000
Utilities
50,400
Lubricants
9,600
$204,000

Fixed Overhead Costs

Supervision
$ 72,000
Amortization
36,000
Insurance
12,000
Rent
9,000
Property taxes
6,000
$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
Indirect labour
$ 6,200
Indirect materials
3,600
Repairs
1,600
Utilities
3,300
Lubricants
830
$15,530

Fixed Overhead Costs

Supervision
$ 6,000
Amortization
3,000
Insurance
1,000
Rent
800
Property taxes
500
$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
Variable costs
Indirect labour
Indirect materials
Repair

18,000
$

5400

20,000
$

6000

22,000
$

6600

24,000
$

7200

3600

4000

4400

4800

1800

2000

2200

2400

Utilities

3780

4200

4620

5040

Lubricants

720

800

880

960

15300

17000

18700

20400

6000

6000

6000

6000

3000

3000

3000

3000

1000

1000

1000

1000

750

750

750

750

500

500

500

500

11250

11250

11250

11250

Total variable
Fixed costs
Supervision
Amortization
Insurance
Rent
Property taxes
Total fixed
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

Direct labour hours

(DLH)
Variable costs
Indirect labour

Budget at

Actual Costs

20,000 DLH

20,000 DLH

6000

6200

Difference
Favourable
F
Unfavourable
U
No
N/A
Difference
$

200

Indirect materials
Repair
Utilities

4000

3600

400

2000

1600

400

4200

3300

900

Lubricants

800

830

30

17000

15530

1470

6000

6000

3000

3000

1000

1000

750

800

50

500

500

11250

11300

50

Total variable
Fixed costs
Supervision
Amortization
Insurance
Rent
Property taxes
Total fixed
Total costs

28250

26830

1420