Refer to DCdesserts.com’s activity-based flexible budget in Exhibit 11–11. Suppose that the company’s activity in June is described as follows:
Process hours | 7,500 |
Production runs | 16 |
New products tested | 30 |
Direct material handled (pounds) | 40,000 |
Required:
1. Determine the flexible budgeted cost for each of the following:
a. Indirect material
b. Utilities
c. Inspection
d. Test kitchen
e. Material handling
f. Total overhead cost
2. Compute the variance for setup cost during the month, assuming that the actual setup cost was $3,000:
a. Using the activity-based flexible budget.
b. Using DCdesserts.com’s conventional flexible budget (Exhibit 11–3).
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