Montgomery Company has developed the following flexible budget formulas for its four overhead items: Variable rate per Overhead item Fixed cost direct labor hour Maintenance $10,000 $ 3.00 Power $

Montgomery Company has developed the following flexible budget formulas for its four overhead items: Variable rate per Overhead item Fixed cost direct labor hour Maintenance $10,000 $  3.00 Power $  1,500 $  0.30 Indirect labor cost $12.00 Equipment lease $  7,000 Total $18,500 $15.30 Montgomery normally produces 15,000 units (each unit requires 0.30 direct labor hours); however, this year, 19,000 units were produced with the following actual costs: Overhead item Actual costs Maintenance $14,000 Power $  2,200 Indirect labor cost $70,000 Equipment lease $  7,000 Total costs $93,200 Using an after-the-fact flexible budget, calculate the variance for power. a.$1,010 U b.$3,000 U c.$1,000 F d.$1,010 F e.None of these choices are correct.

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