Question

Big Daddy Ltd. is a company that manufactures an abdominal exerciser called The DadBod Toner. The...

Big Daddy Ltd. is a company that manufactures an abdominal exerciser called The DadBod Toner. The following information is for three of the company's activities in 2018:

                                                                                        Rate per Output unit/Batch

                                                                      Static                                             Actual

  Activity               Activity Level      Cost Driver                Budget             Cost

Manufacturing       Output unit    Machine hours               $1.10             $1.20

Inspecting                     Batch          Inspection hours          $14.00             12.50

Packaging                      Batch          Packaging hours            $5.75             $5.40

The output measure is the number of units produced.

                                                                                                       Static          Actual

                                                                                                     Budget        Amount

Number of units produced                                                   48,000           49,200

Number of machine hours                                                    12,000           12,300

Batch size in terms of units produced:

        Inspection                                                                                  4                     3

        Packaging                                                                                15                   16

Required:

a.     Calculate the flexible-budget variance for each activity in 2018.

b.     Calculate the price and efficiency variances for each activity in 2018.

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