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34 votes
34 votes
Bonita Industries uses flexible budgets. At normal capacity of 21000 units, budgeted manufacturing overhead is $168000 variable and $360000 fixed. If Bonita had actual overhead costs of $546000 for 26000 units produced, what is the difference between actual and budgeted costs

User Mahmoud Magdy
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1 Answer

21 votes
21 votes

Answer:

$22,000 Favorable

Step-by-step explanation:

The computation of the difference between actual and budgeted cost is given below:

Budgeted Variable Manufacturing Overhead Per Unit is

= $168,000 ÷ 21,000 units

= $8

The Fixed Overhead = $360,000

Now

For 26,000 Units, total Overhead Should be:

Variable = 26,000 × 8 = $208,000

Fixed = $360,000

Total = $568,000

And,

Actual Overhead Cost = $546,000

So,

Difference between Actual and Budgeted Cost is

= $568,000 - $546,000

= $22,000 Favorable

User Cumhur
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