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What is the sales price variance? (a) $350,000 U. (b) $250,000 F (c) $350,000 F (d) $250,000 U. 23. The master budget of a company shows that the planned activity level for next year is expected to be 50,000 machine hours. At this level of activity, the following manufacturing overhead costs are expected. 24· COMPANY MASTER BUDGET FOR PLANNED ACTIVITY LEVEL OF 50,000 MACHINE HOURS Indirect labor Machine supplies Indirect materials Depreciation on factory building 240,000 60,000 70,000 50,000 420,000 Total manufacturing overhead A flexible budget for a level of activity of 60,000 machine hours would show total manufacturing overhead costs of (a) $494,000. (b) $420,000. (c) $504,000. (d) $454,000. 25. Flexible budget variances are used to measure: (a) (b) Efficiency of operations at the actual level of activity Effectiveness of operations at a budgeted level of activity. Effectiveness of operations at the actual level of activity. Efficiency of operations at a budgeted level of activity. (c) (d)
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24. Total manufacturing overheads = $420000

Estimated machine hours = 50000 hrs.

Predetermined overhead rate per machine hour = $420000/50000 = $8.40

Level of activity in flexible budget = 60000 hrs

Manufacturing overheads = 60000 x $8.40 = $504000

(c) $504000

25. (b) Efficiency of operations at the actual level of output

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