TCO F) The following overhead data are for a department of a large company. Actu

Question

TCO F) The following overhead data are for a department of a large company. Actual Costs Incurred Static Budget Activity level (in units) 360 340 Variable costs: Indirect materials $4,182 $4,148 Electricity $2,536 $2,414 Fixed costs: Administration $6,540 $6,500 Ront $6,310 $6,400 Required: Construct a flexible budget performance report that would be useful in assessing how well costs were controlled in this department. In your flexible budget, be sure to indicate whether each noted variance is either favorable or unfavorable.

Explanation / Answer

Actual Flexible budget variance Flexible budget Activity level 360 360 Variable expense Indirect material 4182 210 F 4392 Electricity 2536 20 F 2556 Total variable expense 6718 230 F 6948 Fixed cost Administrative 6540 40 U 6500 Rent 6310 90 F 6400 Total fixed expense 12850 50 F 12900

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