Bluecap Company uses a standard cost system and flexible budgets for control purposes. The following budgeted information pertains to 2021: Denominator volume-number of units Denominator volume-percent 70% of capacity Denominator volume- standard direct labor hours (DLHS) Budgeted variable factory overhead cost at denominator volume 7,000 Total standard factory overhead rate per DLH 28,000 $ 103,200 $ 15.10 During 2021, Bluecap worked 38,000 DLHs and manufactured 9,900 units. The actual factory overhead cost for the year was $14,000 greater than the flexible budget amount for the units produced, of which $8,000 was due to fixed factory overhead. In preparing a budget for 2022 Bluecap decided to raise the level of operation to 90% of capacity (a level it considers to be "practical capacity"), to manufacture 9,300 units at a budgeted total of 27,900 DLHs. The variable overhead efficiency variance in 2021 for Bluecap Company was: (Round your intermediate calculation to 2 decimal places.)
Bluecap Company uses a standard cost system and flexible budgets for control purposes. The following budgeted information pertains to 2021: Denominator volume-number of units Denominator volume-percent 70% of capacity Denominator volume- standard direct labor hours (DLHS) Budgeted variable factory overhead cost at denominator volume 7,000 Total standard factory overhead rate per DLH 28,000 $ 103,200 $ 15.10 During 2021, Bluecap worked 38,000 DLHs and manufactured 9,900 units. The actual factory overhead cost for the year was $14,000 greater than the flexible budget amount for the units produced, of which $8,000 was due to fixed factory overhead. In preparing a budget for 2022 Bluecap decided to raise the level of operation to 90% of capacity (a level it considers to be "practical capacity"), to manufacture 9,300 units at a budgeted total of 27,900 DLHs. The variable overhead efficiency variance in 2021 for Bluecap Company was: (Round your intermediate calculation to 2 decimal places.)
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 Company uses a standard cost
system and flexible budgets for control
purposes. The following budgeted
information pertains to 2021:
Denominator volume-number
of units
7,000
Denominator volume-percent 70%
of capacity
Denominator volume-
standard direct labor hours
(DLHS)
Budgeted variable factory
overhead cost at denominator
volume
Total standard factory
overhead rate per DLH
28,000
$
103,200
$ 15.10
During 2021, Bluecap worked 38,000 DLHs
and manufactured 9,900 units. The actual
factory overhead cost for the year was
$14,000 greater than the flexible budget
amount for the units produced, of which
$8,000 was due to fixed factory overhead.
In preparing a budget for 2022 Bluecap
decided to raise the level of operation to
90% of capacity (a level it considers to be
"practical capacity"), to manufacture 9,300
units at a budgeted total of 27,900 DLHs.
The variable overhead efficiency variance
in 2021 for Bluecap Company was: (Round
your intermediate calculation to 2 decimal
places.)
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