he variable portion of Good Food Corporation's flexible budget for overhead is given below: Machine hours Overhead Rate per hr. 10,000 18,000 24,000 Utilities P1.40 P14,000 P25,000 P33,600 Supplies 0.20 2,000 3,600 4,800 Maintenance 1.20 12,000 21,600 28,800 Miscellaneous 0.80 8,000 14,400 19,200 Last month, the company worked for 16,000 machine hours and incurred the following costs Utilities P 21,000 Supplies 3,500 Maintenance 19,700 Miscellaneous 12,400 Requirements: Compute the variable overhead spending variance. Compute the variable overhead efficiency variance
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.
The variable portion of Good Food Corporation's flexible budget for
Machine hours
Overhead Rate per hr. 10,000 18,000 24,000
Utilities P1.40 P14,000 P25,000 P33,600
Supplies 0.20 2,000 3,600 4,800
Maintenance 1.20 12,000 21,600 28,800
Miscellaneous 0.80 8,000 14,400 19,200
Last month, the company worked for 16,000 machine hours and incurred the following costs
Utilities P 21,000
Supplies 3,500
Maintenance 19,700
Miscellaneous 12,400
Requirements:
- Compute the variable overhead spending variance.
- Compute the variable overhead efficiency variance.
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