Montgomery Company has developed the following flexible budget formulas for its four overhead items:

Montgomery normally produces 15,000 units (each unit requires 0.30 direct labor hours); however, this year 19,000 units were produced with the following actual costs:

- Calculate the variance for maintenance using an after-the-fact flexible budget.

Question

Montgomery Company has developed the following flexible budget formulas for its four overhead items:  
  
Montgomery normally produces 15,000 units (each unit requires 0.30 direct labor hours); however, this year 19,000 units were produced with the following actual costs:

- Calculate the variance for maintenance using an after-the-fact flexible budget.

Quizplus · Accepted Answer

Variance = $14,000 - [$10,000 + ($3.00 × 5,700)] = $13,100 F

Montgomery Company Has Developed the Following Flexible Budget Formulas for Its