The following overhead data are for a department of a large company. Actual Cost
ID: 2427374 • Letter: T
Question
The following overhead data are for a department of a large company.
Actual Costs Incurred
Static Budget
Activity level (in units)
500
450
Variable costs:
Indirect materials
$5,950
$5,382
Electricity
$1,112
$1,008
Fixed costs:
Administration
$2,770
$2,800
Rent
$5,120
$5,100
Required: Construct a flexible budget performance report that would be useful in assessing how well costs were controlled in this department.
Actual Costs Incurred
Static Budget
Activity level (in units)
500
450
Variable costs:
Indirect materials
$5,950
$5,382
Electricity
$1,112
$1,008
Fixed costs:
Administration
$2,770
$2,800
Rent
$5,120
$5,100
Explanation / Answer
Flexible Performance Report
Actual Cost Incurred
Static Budget
Actual Cost At 500 level
Difference
Favorable-F
Unfavorable-U
Activity Level
450
500
500
Variable Costs:
Indirect materials
$5382
$5950
$5980
-30
U
Electricity
$1008
$1112
$1120
-8
U
Fixed Costs
Administration
$2800
$2770
$2800
-30
U
Rent
$5100
$5120
$5100
20
F
Total Cost
$14290
$14952
$15000
-48
U
Flexible Performance Report
Actual Cost Incurred
Static Budget
Actual Cost At 500 level
Difference
Favorable-F
Unfavorable-U
Activity Level
450
500
500
Variable Costs:
Indirect materials
$5382
$5950
$5980
-30
U
Electricity
$1008
$1112
$1120
-8
U
Fixed Costs
Administration
$2800
$2770
$2800
-30
U
Rent
$5100
$5120
$5100
20
F
Total Cost
$14290
$14952
$15000
-48
U
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