Chapter_11_Flexible_Budgets_D1

Chapter_11_Flexible_Budgets_D1 - Flexible Budgets and...

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Unformatted text preview: Flexible Budgets and Overhead Analysis Agenda Discuss Static Budgets Introduce Flexible Budgets Explain Spending Variances Create Own Budget 11-30 Static Budget Larch Company, which makes a single product, bases its budgets for manufacturing overhead on the following data Variable overhead cost category Standard Cost Per Unit Maintenance.............................. $0.60 Indirect materials....................... 1.40 Utilities...................................... 1.00 Total variable overhead cost........ $3.00 Fixed overhead cost category Budgeted Annual Cost Depreciation .............................. $ 40,000 Supervision................................ 50,000 Insurance.................................. 10,000 Total fixed overhead cost ............ $100,000 Larch Company originally planned to produce and sell 10,000 units during the year, but actual activity was only 8,000 units. Larch Company Comparison of Actual Overhead Costs to Budgeted Overhead Costs Original Actual Budget Variance Units produced and sold ..... 8,000 10,000 2,000 U Variable overhead costs: Maintenance................... Maintenance....
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This document was uploaded on 05/04/2009.

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Chapter_11_Flexible_Budgets_D1 - Flexible Budgets and...

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