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.
Homework Answers
Answer #1
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