Question: Blackstone Tools produced 12 000 electric drills during 20X0 Expected production

Blackstone Tools produced 12,000 electric drills during 20X0. Expected production was only 10,500 drills. The company’s fixed-overhead rate is $7 per drill. Absorption-costing operating income for the year is $18,000, based on sales of 11,000 drills.
1. Compute the following:
a. Budgeted fixed overhead
b. Production-volume variance
c. Variable-costing operating income
2. Reconcile absorption-costing operating income and variable-costing operating income. Include the amount of the difference between the two and an explanation for the difference.

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  • CreatedNovember 19, 2014
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