Dude Skis closely tracks the direct cost of its skis, and does so by comparing actual variable costs per unit to budgeted costs. The following report shows its direct cost analysis for January production of its low cost line of children’s introductory skis. Actual unit production = 2,703 ski pairs
|
Variable Cost Item |
Actual Cost per Unit |
Budgeted Cost per Unit |
Variance per Unit |
|
Wood core |
$42.50 |
$41.75 |
$0.75 |
|
Fiberglas wrap |
38.84 |
37.52 |
1.32 |
|
Edging |
4.11 |
4.03 |
0.08 |
|
Tip and tail caps |
0.39 |
0.42 |
+0.03 |
|
Lamination |
4.72 |
4.73 |
+0.01 |
|
Totals |
$90.56 |
$88.45 |
$2.11 |
The report does not include direct labor, since Dude’s management does not feel that labor costs vary sufficiently with production volumes to warrant being included in the report.