Bluecap Co. uses a standard cost system and flexible budgets for control purposes. The following budgeted information pertains to 2019: . During 2019, Bluecap worked 28,000 DLHS and manufactured 9,600 units. The actual factory overhead cost for the year was $14.000 greater than the flexible budget amount for the units produced, of which $6,000 was due to fixed factory overhead. In preparing a budget for 2020 Bluecap decided to raise the level of operation to 90% of capacity (a level it considers to be "practical capacity"), to manufacture 9,000 units at a budgeted total of 27,000 DLHs. ● Denominator volume-number of units Denominator volume-percent of capacity. Denominator volume-standard direct labor hours (DLHS). Budgeted variable factory overhead cost at denominator volume Total standard factory overhead rate per DLH The total factory overhead spending variance in 2019 (to the nearest whole dollar), based on a three-variance breakdown (decomposition) of the total overhead variance for Bluecap Co., was: Multiple Choice . ● 8,000 80% 24,000 $103,200 $15.10 $3,200 favorable. $11,440 unfavorable. $15,040 favorable. $17,280 favorable. $17,440 unfavorable.
Bluecap Co. uses a standard cost system and flexible budgets for control purposes. The following budgeted information pertains to 2019: . During 2019, Bluecap worked 28,000 DLHS and manufactured 9,600 units. The actual factory overhead cost for the year was $14.000 greater than the flexible budget amount for the units produced, of which $6,000 was due to fixed factory overhead. In preparing a budget for 2020 Bluecap decided to raise the level of operation to 90% of capacity (a level it considers to be "practical capacity"), to manufacture 9,000 units at a budgeted total of 27,000 DLHs. ● Denominator volume-number of units Denominator volume-percent of capacity. Denominator volume-standard direct labor hours (DLHS). Budgeted variable factory overhead cost at denominator volume Total standard factory overhead rate per DLH The total factory overhead spending variance in 2019 (to the nearest whole dollar), based on a three-variance breakdown (decomposition) of the total overhead variance for Bluecap Co., was: Multiple Choice . ● 8,000 80% 24,000 $103,200 $15.10 $3,200 favorable. $11,440 unfavorable. $15,040 favorable. $17,280 favorable. $17,440 unfavorable.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:Bluecap Co. uses a standard cost system and flexible budgets for control purposes. The following budgeted information pertains to 2019:
.
During 2019, Bluecap worked 28,000 DLHS and manufactured 9,600 units. The actual factory overhead cost for the year was $14.000 greater than the flexible budget.
amount for the units produced, of which $6,000 was due to fixed factory overhead. In preparing a budget for 2020 Bluecap decided to raise the level of operation to 90% of
capacity (a level it considers to be "practical capacity), to manufacture 9,000 units at a budgeted total of 27,000 DLHs.
●
The total factory overhead spending variance in 2019 (to the nearest whole dollar), based on a three-variance breakdown
(decomposition) of the total overhead variance for Bluecap Co., was:
Multiple Choice
●
Denominator volume-number of units
Denominator volume-percent of capacity
Denominator volume-standard direct labor hours (DLHs)
Budgeted variable factory overhead cost at denominator volume
Total standard factory overhead rate per DLH
.
●
8,000
80%
$3,200 favorable.
$11,440 unfavorable.
24,000
$103,200
$15.10
$15,040 favorable.
$17,280 favorable.
$17,440 unfavorable.
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