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Russ Industries uses flexible budgets. At normal capacity of 16,500 units, budgeted manufacturing overhead is: $59,400...

Russ Industries uses flexible budgets. At normal capacity of 16,500 units, budgeted manufacturing overhead is: $59,400 variable and $392,000 fixed. If the company had actual overhead costs of $449,000 for 15,200 units produced, what is the difference between actual and budgeted costs?

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Answer #1
NORMAL CAPACITY 16500 UNITS
BUDGETED MANUFACTURING OVERHEAD
VARIABLE $59400
FIXED $392000
BUDGETED MANUFACTURING OVERHEAD AT 15200 UNITS
VARIABLE 59400/16500*15200
54720
FIXED 392000
TOTAL BUDGETED OVERHEAD COSTS 446720
ACTUAL MANUFACTURING OVERHEAD AT 15200 UNITS 449000
DIFFERENCE BETWEEN ACTUAL AND BUDGETED COSTS= ACTUAL MANUFACTURING COSTS-BUDGETED MANUFACTURING COSTS
2280 ADVERSE
NOTE: VARIABLE MANUFACTURING COSTS VARY WITH NUMBER OF GOOD PRODUCED BUT IN CASE OF FIXED MANUFACTURING COSTS, IT REMAINS UNCHANGED IRRESPECTIVE OF THE NUMBER OF GOODS PRODUCED
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