GAP Industries uses flexible budgets. At normal capacity of 32000 units, budgeted manufacturing overhead is: $96000 variable and $540374 fixed. If GAP Industries had actual overhead costs of $642000 for 35810 units produced, what is the difference between actual and budgeted costs?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Question

Please do not give solution in image format thanku 

GAP Industries uses flexible budgets. At normal
capacity of 32000 units, budgeted
manufacturing overhead is: $96000 variable
and $540374 fixed. If GAP Industries had actual
overhead costs of $642000 for 35810 units
produced, what is the difference between actual
and budgeted costs?
a. -5626 unfavourable
b. 5804 favourable
c. 5804 favourable
d. 11430 unfavourable
e. 5804 unfavourable
Transcribed Image Text:GAP Industries uses flexible budgets. At normal capacity of 32000 units, budgeted manufacturing overhead is: $96000 variable and $540374 fixed. If GAP Industries had actual overhead costs of $642000 for 35810 units produced, what is the difference between actual and budgeted costs? a. -5626 unfavourable b. 5804 favourable c. 5804 favourable d. 11430 unfavourable e. 5804 unfavourable
Expert Solution
steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Budgeting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education