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Flexibility-budget variance

Toymaster, Inc. produces a toy car TGC, in batches. After each batch of TGC is run, the molds are cleaned. The labor costs of cleaning the mold can be traced to TGC because TGC can only be produced from a specific mold. The following information pertains to June 2004:

1)Calculate the flexibility-budget variance for total cleaning labor cost in June 2004.

2)Calculate the price and efficiency variance for total cleaning labor costs in June 2004. Comment on the results.

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Flexible budgeting, activity-based costing, variance analysis. Toymaster, Inc. produces a toy car TGC, in batches. After each batch of TGC is run, the molds are cleaned. The labor costs of cleaning the mold can be traced to TGC because TGC can only be produced from a specific mold. The following information pertains to June 2004:

Static-Budget Amounts Actual Amounts
Units of TGC produced and sold 30,000 22,500
Batch size (units per batch) 250 225
Cleaning labor-hours per batch 3 3.5
Cleaning labor cost per hour $14 $12.50 ...

Solution Summary

Excel file contain formulas and calculations of flexibility-budget variance and price and efficiency variance.

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