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Author Question: River Falls Company uses a flexible budget for its indirect manufacturing costs. For 2017, the ... (Read 78 times)

tatyanajohnson

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on: Mar 6, 2021
River Falls Company uses a flexible budget for its indirect manufacturing costs. For 2017, 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 2017 were: 

Actual costs
Product handling$70,000
Inspection16,000
Utilities2,000
Maintenance3,000
Supplies40,000

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.
Horngren's Cost Accounting: A Managerial Emphasis ¦ Datar, Rajan ¦ 16th Edition
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Marked as best answer by tatyanajohnson on Mar 6, 2021

sierramartinez

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Reply #1 on: Mar 6, 2021
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tatyanajohnson

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Reply 2 on: Mar 6, 2021
:D TYSM

chereeb

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Reply 3 on: Yesterday
Wow, this really help

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