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:
| Product handling | $45,000 | $0.75 | per unit |
| Inspection | 12,000 | 12.00 | per 100 unit batch |
| Utilities | 600 | 6.00 | per 100 unit batch |
| Maintenance | 1,250 | 0.25 | per machine-hour |
| Supplies | 5.00 | per 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:
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.
The river continuum.
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Mastering Biology Question
Mastering Biology Question