Exercise 2:Draw up a flexible budget for overhead expenses on the basis of the following data and deteminethe overhead rates at 70%, 80% and 90% plant capacity.At 80% CapacityOMR.Variable Overheads:Indirect labor12,0004,000Stores including sparesSemi-variable Overheads:Power (30% fixed, 70% variable)Repairs and maintenance (60% fixed, 40% variable)20,0002,000Fixed Overheads:DepreciationInsurance11,0003,000SalariesTotal Overheads10,00062,0001,24,000 hrs.Estimated direct labor hours

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Description: Exercise 2:Draw up a flexible budget for overhead expenses on the basis of the following data and deteminethe overhead rates at 70%, 80% and 90% plant capacity.At 80% CapacityOMR.Variable Overheads:Indirect labor12,0004,000Stores including sparesSem

The difference that arises between the flexible budget and actual results is termed flexible budget…

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Accounting

Draw up a flexible budget for overhead expenses on the basis of the following data and detemine the overhead rates at 70%, 80% and 90% plant capacity. At 80% Capacity OMR. Variable Overheads: Indirect labor Stores including spares Semi-variable Overheads: 12,000 4,000 Power (30% fixed, 70% variable) Repairs and maintenance (60% fixed, 40% variable) Fixed Overheads: Depreciation Insurance Salaries Total Overheads Estimated direct labor hours 20,000 2,000 11,000 3,000 10,000 62,000 1,24,000 hrs.

Draw up a flexible budget for overhead expenses on the basis of the following data and detemine the overhead rates at 70%, 80% and 90% plant capacity. At 80% Capacity OMR. Variable Overheads: Indirect labor Stores including spares Semi-variable Overheads: 12,000 4,000 Power (30% fixed, 70% variable) Repairs and maintenance (60% fixed, 40% variable) Fixed Overheads: Depreciation Insurance Salaries Total Overheads Estimated direct labor hours 20,000 2,000 11,000 3,000 10,000 62,000 1,24,000 hrs.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 2E: Identify cost graphs The following cost graphs illustrate various types of cost behavior: For each...

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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

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Question

Exercise 2:
Draw up a flexible budget for overhead expenses on the basis of the following data and detemine
the overhead rates at 70%, 80% and 90% plant capacity.
At 80% Capacity
OMR.
Variable Overheads:
Indirect labor
12,000
4,000
Stores including spares
Semi-variable Overheads:
Power (30% fixed, 70% variable)
Repairs and maintenance (60% fixed, 40% variable)
20,000
2,000
Fixed Overheads:
Depreciation
Insurance
11,000
3,000
Salaries
Total Overheads
10,000
62,000
1,24,000 hrs.
Estimated direct labor hours

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