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At the end of 2008, Cyril Fedako, CFO for Fedako Products received a report comparing budgeted and actual production costs for the company’s plant in Forest Lake, Minnesota.Difference $300,000200,00025,00010,00030,00005,00015,000$585,000His first thoughts was that costs must be out of control since actual costs exceeded the budget by $585,000. However, he quickly recalled that the budget was set assuming a production level of 50,000 units. The Forest Lake plant actually produced 55,000 units in 2008.A. Given that production was greater than planned, should Cyril expect that all actual costs will be greeater than budgeted? Which costs would you expect to increase and which costs whould you expect to remain relatively constant?B. Cyril is extremly busy, the company has six other plants. Therefore, he cannot spend time investigating every departure from the budget. With this in mind, which cost(s) should Cyril concentrate on in his investigation of budget differences?
At the end of 2008, Cyril Fedako, CFO for Fedako Products received a report comparing budgeted and actual production costs for the company’s plant in Forest Lake, Minnesota.Budget Actual…
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