Institute Technologies is choosing new cost drivers for its accounting system. One driver is labor hours; the other is a combination of machine hours for unit variable costs and number of setups for a pool of batch-level costs. Data for the past year follow. Budget Actual Labor hours 209,000 209,000 Machine hours 369,000 459,000 Number of setups 3,900 4,200 Unit variable cost pool $1,660,500 $2,065,500 Batch-level cost pool $1,053,000 $1,134,000 Assume that both cost pools for Institute are combined into a single pool, and labor hours is the driver. The total flexible budget for the actual level of labor hours and the total variance for the combined pool are: Flexible Budget Variance А. $1,660,500 $405,000 U $2,713,500 $2,794,500 $3,118,500 в. $486,000 U с. $405,000 U D. $ 81,000 U Е. $3,199,500 %24

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Institute Technologies is choosing new cost drivers for its accounting system. One driver is labor
hours; the other is a combination of machine hours for unit variable costs and number of setups
for a pool of batch-level costs. Data for the past year follow.
Budget
209,000
369,000
Actual
Labor hours
209,000
459,000
Machine hours
Number of setups
3,900
4,200
$2,065,500
Unit variable cost pool
$1,660,500
$1,053,000
Batch-level cost pool
$1,134,000
Assume that both cost pools for Institute are combined into a single pool, and labor hours is the
driver. The total flexible budget for the actual level of labor hours and the total variance for the
combined pool are:
Flexible Budget
Variance
А.
$1,660,500
$405,000 U
$2,713,500
$486,000 U
$405,000 U
$ 81,000 U
В.
С.
$2,794,500
$3,118,500
$3,199,500
D.
Е.
$
Transcribed Image Text:Institute Technologies is choosing new cost drivers for its accounting system. One driver is labor hours; the other is a combination of machine hours for unit variable costs and number of setups for a pool of batch-level costs. Data for the past year follow. Budget 209,000 369,000 Actual Labor hours 209,000 459,000 Machine hours Number of setups 3,900 4,200 $2,065,500 Unit variable cost pool $1,660,500 $1,053,000 Batch-level cost pool $1,134,000 Assume that both cost pools for Institute are combined into a single pool, and labor hours is the driver. The total flexible budget for the actual level of labor hours and the total variance for the combined pool are: Flexible Budget Variance А. $1,660,500 $405,000 U $2,713,500 $486,000 U $405,000 U $ 81,000 U В. С. $2,794,500 $3,118,500 $3,199,500 D. Е. $
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