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asked that you review the company's costing system and "do what you can to help us get better control of our manufacturing overhead costs." You find that the company has never used a flexible budget, and you suggest that preparing such a budget would be an excellent first step in overhead planning and control. After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March: Utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $16,000+ $0.19 per machine-hour $38,900 $1.30 per machine-hour $0.48 per machine-hour $94,000+ $1.20 per machine-hour $67,500 Actual Cost in March $ 22,390 $ 60,000 $ 8,200 $120, 100 $ 69,200 During March, the company worked 19,000 machine-hours and produced 13,000 units. The company had originally planned to work 21,000 machine-hours during March. Required: Calculate the activity variances for March. 2. Calculato

asked that you review the company's costing system and "do what you can to help us get better control of our manufacturing overhead costs." You find that the company has never used a flexible budget, and you suggest that preparing such a budget would be an excellent first step in overhead planning and control. After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March: Utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $16,000+ $0.19 per machine-hour $38,900 $1.30 per machine-hour $0.48 per machine-hour $94,000+ $1.20 per machine-hour $67,500 Actual Cost in March $ 22,390 $ 60,000 $ 8,200 $120, 100 $ 69,200 During March, the company worked 19,000 machine-hours and produced 13,000 units. The company had originally planned to work 21,000 machine-hours during March. Required: Calculate the activity variances for March. 2. Calculato

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter3: Cost Behavior
Section: Chapter Questions
Problem 35P: The management of Wheeler Company has decided to develop cost formulas for its major overhead...
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asked that you review the company's costing system and "do what you can to help us get better control of our manufacturing overhead costs." You find that the company has never used a flexible budget, and you suggest that preparing such a budget would be an excellent first step in overhead planning and control. After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March: Utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $16,000+ $0.19 per machine-hour $38,900 $1.30 per machine-hour $0.40 per machine-hour $94,000+ $1.20 per machine-hour $67,500 Actual Cost in March $ 22,390 Required: 1. Calculate the activity variances for March. 2. Calculate the spending variances for March. $60,000 $ 8,200 $120, 100 $ 69,200 During March, the company worked 19,000 machine-hours and produced 13,000 units. The company had originally planned to work 21,000 machine-hours during March.
Transcribed Image Text:asked that you review the company's costing system and "do what you can to help us get better control of our manufacturing overhead costs." You find that the company has never used a flexible budget, and you suggest that preparing such a budget would be an excellent first step in overhead planning and control. After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March: Utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $16,000+ $0.19 per machine-hour $38,900 $1.30 per machine-hour $0.40 per machine-hour $94,000+ $1.20 per machine-hour $67,500 Actual Cost in March $ 22,390 Required: 1. Calculate the activity variances for March. 2. Calculate the spending variances for March. $60,000 $ 8,200 $120, 100 $ 69,200 During March, the company worked 19,000 machine-hours and produced 13,000 units. The company had originally planned to work 21,000 machine-hours during March.
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