Accounting for Decision Making and Control 6th Edition by Jerold Zimmerman

Exercise 2

Adrian Power manufactures small power supplies for car stereos. The company uses flexible budgeting techniques to deal with the seasonal and cyclical nature of the business. The accounting department provided the accompanying data on budgeted manufacturing costs for the month of January:
ADRIAN POWER
Planned Level of Production for January
Required:
a. Prepare a report comparing the actual operating results with the flexible budget at actual production.
b. Write a short memo analyzing the report prepared in (a). What likely managerial implications do you draw from this report What are the numbers telling you