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Home Q & A Board Other Fields Homework Help Business Accounting
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Meesh1234 Meesh1234
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6 years ago
Teecorp Company uses a flexible budget for its indirect manufacturing costs. For 2015, the company anticipated that it would produce 27,000 units with 4,800 machine-hours and 8,000 employee days. The costs and cost drivers were to be as follows:

FixedVariableCost driver
Product handling$45,000$0.75per unit
Inspection12,00012.00per 100 unit batch
Utilities6006.00per 100 unit batch
Maintenance1,2500.25per machine-hour
Supplies5.00per employee day

During the year, the company processed 26,500 units, worked 8,200 employee days, and had 4,850 machine-hours. The actual costs for 2015 were:

Actual costs
Product handling$65,000
Inspection16,200
Utilities2,220
Maintenance2,850
Supplies39,900

Required:
a.Prepare the static budget using the overhead items above and then compute the static-budget variances.
b.Prepare the flexible budget using the overhead items above and then compute the flexible-budget variances.
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katiemcclain1katiemcclain1
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6 years ago
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Meesh1234 Author
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#2
6 years ago
Good timing, thanks!
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