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# Flexible budget analysis (Variance Report)

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You brought your work home one evening, and your nephew spilled his chocolate milk shake on the variance report you were preparing. Fortunately, you were able to reconstruct the obliterated information from the remaining data. Fill in the missing numbers below. (Hint: It is helpful to solve for the unknowns in the order indicated by the letters in the following table.)

Standard machine hours per unit of output = 4 hours
Standard variable overhead rate per machine hour = \$8
Actual variable overhead rate per machine hour = (B)
Actual machine hours per unit of output = (D)
Budgeted production in units = 25,000
Actual production in units = (C)
Variable overhead spending variance = \$72,000 (unfavorable)
Variable overhead efficiency variance = \$192,000 (favorable)
Fixed overhead budget variance = \$15,000 (unfavorable)
Fixed overhead volume variance = (G)
Total budgeted overhead (flexible budget) = (E)
Total budgeted overhead (static budget) = (F)

Please show intermediate calculations for all missing numbers, thank you.

#### Solution Preview

Standard machine hours per unit of output 4 hours
Standard variable overhead rate per machine hour \$8
Actual variable overhead rate per machine hour \$9
Actual machine hours per unit of output 3 hours
Budgeted production in units 25,000
Actual production in units 24,000
Variable overhead spending variance \$72,000 (unfavorable)
Variable overhead efficiency variance \$192,000 (favorable)
Fixed overhead budget variance \$15,000 (unfavorable)