In Rooney Company, direct labor is $21 per hour. The company expects to operate at 11,000 direct labor hours each month. In January 2017, direct labor totaling $236,900 is incurred in working 12,900 hours.

In Rooney Company, direct labor is $21 per hour. The company expects to operate at 11,000 direct labor hours each month. In January 2017, direct labor totaling $236,900 is incurred in working 12,900 hours.

Prepare a static budget report.

ROONEY COMPANY Static Direct Labor Budget Report For the Month Ended January 31, 2017
Product Line		Budget		Actual		Difference
Direct Labor		$		$		$	Unfavorable Favorable Neither Favorable nor Unfavorable

 

Prepare a flexible budget report.

ROONEY COMPANY Flexible Direct Labor Budget Report For the Month Ended January 31, 2017
Product Line		Budget		Actual		Difference
Direct Labor		$		$		$	Favorable Unfavorable Neither Favorable nor Unfavorable

Explanation

Budget = (11,000 × $21) = $231,000

 

Budget = (12,900 × $21) = $270,900