Management Accounting

B&L Landscapes, Inc. Mini Practice Part 5

Bill Graham and Larry Miller incorporated B&L Landscapes, Inc. on July 1, 2014. The business consists of lawn care and sprinkler system installations. In addition, they also sell two types of fertilizer.

During 2015, B&L Landscapes, Inc. acquired a 30% interest in Crestline Pipe. The president of Crestline wants to develop a management report to evaluate Manufacturing Overhead costs. Bill and Larry want to help and have volunteered your services to provide some managerial reporting for Crestline.

Crestline Pipe distributes high-quality PVC pipe and has the following information for the month of March, 2015

Instructions:

1. Prepare a flexible manufacturing overhead budget based on the following amounts produced.

1. 115,500 LF
2. 116,500 LF
3. 117,500 LF
4. 118,500 LF
5. 119,500 LF

1. Prepare a flexible budget report showing the differences (favorable and unfavorable) in manufacturing overhead costs for the month of March. Include your analysis of what variances should be investigated further.
2. Prepare a responsibility report for the manufacturing overhead for March, assuming only variable costs are controllable. Provide a brief evaluation of how this information could be used to measure the manufacturing manager’s performance.