Prevlar’s budget for variable overhead and fixed overhead revealed the following information for an anticipated 41,600 hours of activity: variable overhead, $428,480; fixed overhead, $640,000.
The company actually worked 44,600 hours and actual overhead incurred was: variable, $442,500; fixed, $640,000.

Required:

1. Compute the company's total cost variance for variable overhead and fixed overhead if the firm uses a static budget to help assess performance.
2. Compute the company's total cost variance for variable overhead and fixed overhead if the firm uses a static budget to help assess performance. Assuming the use of a flexible budget.
3. Which of the two budgets (static or flexible) is preferred for performance evaluations?
4.  

Transcribed Image Text:

A. Actual B. Flexible budget Preferred for performance C. evaluations? A. Actual B. Flexible budget Preferred for performance C. evaluations?

Answer rating: 100% (QA)

Solution of all three parts is given below A Actual 442500 640... View the full answer