Réquired: A. Compute the company's total cost variance for variable overhead and fixed overhead if the firm uses a static budget to help assess performance. B. Compute the company's total cost variance for variable overhead and fixed overhead if the firm uses a flexible budget to help assess performance. C. Which of the two budgets (static or flexible) is preferred for performance evaluations?
Réquired: A. Compute the company's total cost variance for variable overhead and fixed overhead if the firm uses a static budget to help assess performance. B. Compute the company's total cost variance for variable overhead and fixed overhead if the firm uses a flexible budget to help assess performance. C. Which of the two budgets (static or flexible) is preferred for performance evaluations?
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter9: Standard Costing: A Functional-based Control Approach
Section: Chapter Questions
Problem 16E: Refer to the data in Exercise 9.15. Required: 1. Compute overhead variances using a two-variance...
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Could you please help me with the correct calculations and answers for the screenshot attached.
Transcribed Image Text:Prevlar's budget for variable overhead and fixed overhead revealed the following information for an anticipated 40,100 hours of
activity: variable overhead, $352,880; fixed overhead, $602,500.
The company actually worked 43,100 hours and actual overhead incurred was: variable, $367,500; fixed, $610,000.
Required:
A. Compute the company's total cost variance for variable overhead and fixed overhead if the firm uses a static budget to help assess
performance.
B. Compute the company's total cost variance for variable overhead and fixed overhead if the firm uses a flexible budget to help
assess performance.
C. Which of the two budgets (static or flexible) is preferred for performance evaluations?
A. Actual
$
977,500
Less: Static budget
955,380
22,120
Variance, unfavorable
$
B. Flexible budget
$
977,500
Less: Actual
Variance, favorable
C. Preferred for performance evaluations?
Flexible budget
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