# Direct materials direct costs flexible budget static

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Direct materials Direct Costs Flexible Budget Static Budget The Budgets Before we compute the variances, let’s determine the overhead application rates the firm used: 8.00/DLH 11.90/DLH 40,000 x .50 = 160,000 = Fixed OH rate 40,000 x .50 = 238,000 = Variable OH rate
(21.4 x 11.9) – 249.9 = 4.76 U 21.4 x 14 – 294 = 5.6 U (204 x 1.65) – 346.5 = 9.9 F Efficiency 248.88 – (21.4 x 11.9) = 5.78 F 280 – (21.4 x 14) = 19.6 F 377.4 – (204 x 1.65) = 40.8 U Price/Spending 248.88 – 249.9 = 1.02 F 280 – 294 = 14.0 F 377.4 – 346.5 = 30.9 U Flexible budget Variable Cost Variances (\$000) 249.9 – 238 = 11.9 U 294 – 280 = 14.0 U 346.5 – 330 = 16.5 U Volume 248.88 – 238 = 10.88 U 280 – 280 = 0.0 377.4 – 330 = 47.4 U Static budget Variable O’head Dr. Labor Dr. Material Variance 160 – (42 x .5 x 8) = 8.0 F Production-Volume 159.12 – 160 = 0.88 F Spending 159.12 – (42 x .5 x 8) = 8.88 F Total Fixed Overhead Variances (\$000)