The condensed flexible budget of the Evergreen Company for the year is given below:Direct labor-hours Direct labor- hoursOverhead costs: 30,000 40,000 50,000 Variable costs$75,000 ? ? Fixed costs ? ? $320,000 The company produces a single product that requires 2.5 direct labor-hours to complete. The direct labor wage rate is $7.50 per hour. Three yards of raw material are required for each unit of product, at a cost of $5 per yard.Assume that the company chooses 50,000 direct labor-hours as the denominator level of activity, but actually worked 48,000 hours during the year, producing 18,500 units.Actual overhead costs for the year are: Variable costs$124,800 Fixed costs 321,700 Total overhead costs$446,500 Required:(Be sure to indicate whether the variances
are favorable or unfavorable.)a. Compute the variable overhead price variance and the variable overhead efficiency variance.b. Compute the fixed overhead spending (budget) variance and the production volume variance.
What will be an ideal response?
Variable OH rate = $75,000/30,000 = $2.50 per DLH; Fixed OH rate = $320,000/50,000 = $6.40 per DLH.
a. $124,800 - ($2.50 × 48,000) = $4,800 unfavorable; ($2.50 × 48,000) - [$2.50 × (18,500 × 2.5)] = $4,375 unfavorable.
b. $321,700 - $320,000 = $1,700 unfavorable; $320,000 - [$6.40 × (18,500 × 2.5)] = $24,000 unfavorable.
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a. gain an admission. b. find out specific details related to the fraud. c. establish credibility of the respondent. d. obtain facts previously unknown.
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a. True b. False Indicate whether the statement is true or false
______ refers to the use of strategies to increase the speed with which an organization goes from creativity to delivery.
a. Pace-based competition b. Efficiency competition c. Innovative competition d. Time-based competition