Question

​J&J Materials and Construction Corporation produces mulch and distributes the product by using dump trucks. The company uses budgeted fleet hours to allocate variable manufacturing overhead. The following information pertains to the​ company's manufacturing overhead​ data: Budgeted output units 710 truckloads Budgeted fleet hours 568 hours Budgeted variable manufacturing overhead costs for 710 loads $89,460 Actual output units produced and delivered 660 truckloads Actual fleet hours 468 hours Actual variable manufacturing overhead costs $85,460 What is the​ flexible-budget amount for variable manufacturing​ overhead? (Round intermediary calculations two decimal places and your final answer to the nearest whole​ dollar.)

Answer 1

$3,999.04 F

Step-by-step explanation:

Calculation to determine the​ flexible-budget amount for variable manufacturing​ overhead?

First step is to calculate the Budgeted fleet hours per unit

Budgeted fleet hours per unit = 568 ÷ 710

Budgeted fleet hours per unit = 0.8

Second step is to calculate the Budgeted fleet hours allowed for 660 truckloads

Budgeted fleet hours allowed for 660 truckloads

Budgeted fleet hours allowed for 660 truckloads = 660 × 0.8

Budgeted fleet hours allowed for 660 truckloads = 528

Third step is to calculate the Budgeted variable overhead rate per machine hour

Budgeted variable overhead rate per machine hour = $89,460 ÷ 528

Budgeted variable overhead rate per machine hour = $169.43

Fourth step is to calculate the Flexible-budget amount

Flexible-budget amount = 528× $169.43

Flexible-budget amount= $89,459.04

Now let calculate the Flexible-budget variance

Flexible-budget variance = $85,460 − $89,459.04

Flexible-budget variance= $3,999.04 F

Therefore the Flexible-budget variance is $3,999.04 F