Larry Miller, controller for Kipling Company, has been instructed to develop a flexible budget for overhead costs. The company produces two types of frozen desserts: Icey and Tasty. The two desserts use common raw materials in different proportions. The company expects to produce 200,000 gallons of each product during the coming year. Icey requires 0.25 direct labor hour per gallon and Tasty requires 0.30. Larry has developed the following fixed and variable costs for each of the four overhead items:

-Refer to Figure 11-7. Assume that Kipling actually produced 240,000 gallons of Icey and 200,000 of Tasty. The actual overhead costs incurred were:
Required:

Question

Larry Miller, controller for Kipling Company, has been instructed to develop a flexible budget for overhead costs. The company produces two types of frozen desserts: Icey and Tasty. The two desserts use common raw materials in different proportions. The company expects to produce 200,000 gallons of each product during the coming year. Icey requires 0.25 direct labor hour per gallon and Tasty requires 0.30. Larry has developed the following fixed and variable costs for each of the four overhead items:
 
-Refer to Figure 11-7. Assume that Kipling actually produced 240,000 gallons of Icey and 200,000 of Tasty. The actual overhead costs incurred were:
  Required:

Quizplus · Accepted Answer

The Answer of Larry Miller, controller for Kipling Company, has been instructed to develop a flexible budget for overhead costs. The company produces two types of frozen desserts: Icey and Tasty. The two desserts use common raw materials in different proportions. The company expects to produce 200,000 gallons of each product during the coming year. Icey requires 0.25 direct labor hour per gallon and Tasty requires 0.30. Larry has developed the following fixed and variable costs for each of the four overhead items:
 
-Refer to Figure 11-7. Assume that Kipling actually produced 240,000 gallons of Icey and 200,000 of Tasty. The actual overhead costs incurred were:
  Required:

Larry Miller, Controller for Kipling Company, Has Been Instructed to Develop