Fifth edition Alnoor Bhimani Charles T. Horngren Srikant M. Datar Madhav V. Rajan Farah Ahamed

Spending and efficiency overhead variances, service sector

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• Actual Flexible budget Static budget

16.20 Spending and efficiency overhead variances, service sector. (20–25 min) 1 Budgeted variable overhead rate = DKr 2 per hour of home delivery time Budgeted fixed overhead rate = DKr 24,000 8,000 0.80 × = 24,000 6,400 = DKr 3.75 per hour of home delivery time A detailed comparison of actual and flexible budgeted amounts is Actual Flexible budget Static budget Output units (deliveries) c 7,460 8,000 Allocation base (hours) ca 6,400 b Allocation base per output unit c 0.80 0.80 Variable MOH DKr c DKr d – Variable MOH per hour DKr 2.53 e DKr 2.00 DKr 2.00 Fixed MOH DKr 27,600 c DKr 24,000 DKr 24,000 Fixed MOH per hour DKr f – DKr 3.75 g a 7,460 × 0.80 = 5,968 b 8,000 × 0.80 = 6,400 c 5,595 ÷ 7,460 = 0.75 d 7,460 × 0.80 × DKr 2.00 = DKr 11,936 e DKr 14,174 ÷ 5,595 = DKr 2.53 f DKr 27,600 ÷ 5,595 = DKr 4.93 h DKr 24,000 ÷ 6,400 = DKr 3.75 The required variances are Download 1.72 Mb. Share with your friends: