Brown Dental Equipment uses a flexible budget for its indirect manufacturing costs. For 2012 the company anticipated that it would produce 36,000 components with 7,000 machine hours and 14,400 employee days. The costs and cost drivers were to be as follows:
During the year the company processed 40,000 units, worked 15,000 employee days, and had 8,000 machine hours. The actual costs for 2012 were:
Required:
a. Prepare an overhead static budget for 2012 with variances.
b. Prepare an overhead flexible budget for 2012 with variances.

Question

Brown Dental Equipment uses a flexible budget for its indirect manufacturing costs. For 2012 the company anticipated that it would produce 36,000 components with 7,000 machine hours and 14,400 employee days. The costs and cost drivers were to be as follows:
  During the year the company processed 40,000 units, worked 15,000 employee days, and had 8,000 machine hours. The actual costs for 2012 were:
  Required:
a. Prepare an overhead static budget for 2012 with variances.
b. Prepare an overhead flexible budget for 2012 with variances.

Quizplus · Accepted Answer

The Answer of Brown Dental Equipment uses a flexible budget for its indirect manufacturing costs. For 2012 the company anticipated that it would produce 36,000 components with 7,000 machine hours and 14,400 employee days. The costs and cost drivers were to be as follows:
  During the year the company processed 40,000 units, worked 15,000 employee days, and had 8,000 machine hours. The actual costs for 2012 were:
  Required:
a. Prepare an overhead static budget for 2012 with variances.
b. Prepare an overhead flexible budget for 2012 with variances.

Brown Dental Equipment Uses a Flexible Budget for Its Indirect