question archive Bluecap Company uses a standard cost system and flexible budgets for control purposes
Bluecap Company uses a standard cost system and flexible budgets for control purposes
Subject:AccountingPrice: Bought3
Bluecap Company uses a standard cost system and flexible budgets for control purposes. The following budgeted information pertains to 2021:
Denominator volume—number of units 7,000, Denominator volume—percent of capacity 70%, Denominator volume—standard direct labor hours (DLHs) 28,000, Budgeted variable factory overhead cost at denominator volume $ 102,800, Total standard factory overhead rate per DLH $ 15.10
During 2021, Bluecap worked 37,000 DLHs and manufactured 9,500 units. The actual factory overhead cost for the year was $18,000 greater than the flexible budget amount for the units produced, of which $7,000 was due to fixed factory overhead. In preparing a budget for 2022 Bluecap decided to raise the level of operation to 90% of capacity (a level it considers to be "practical capacity"), to manufacture 8,900 units at a budgeted total of 26,700 DLHs. The total overhead variance in 2021 for Bluecap Company was: (Round your intermediate calculation to 2 decimal places.) PLEASE SHOW ALL STEPS
Answer Choices:
A. $73,500 favorable
B. $96,300 favorable
C. $75,740 favorable
D.$18,000 unfavorable
E. $96,300 unfavorable
