Electric Eels Company produces high-quality electric eels for Museums and Aquaria to sell in their gift shops.

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Electric Eels Company produces high-quality electric eels for Museums and Aquaria to sell in their gift shops. It accounts for the production of these eels with an ABC system. For 2015, Electric Eels expected to produce and sell 16,000 units, but actual output was only 15,000 units.

You are a new management accountant at the company. You have been asked to calculate the variances for the batch-level costs. The two main batch-level costs are setup and quality inspection. Quality inspection is driven by inspection-hours, and setup is driven by the number of setup-hours.

Electric Eels Company produces high-quality electric eels for Museums and

Required
1. Calculate the flexible-budget, rate, and efficiency variances for both batch activities.
2. Write a short memo to your boss, the controller, explaining the variances that you calculated.

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Related Book For  book-img-for-question

Cost Accounting A Managerial Emphasis

ISBN: 978-0133138443

7th Canadian Edition

Authors: Srikant M. Datar, Madhav V. Rajan, Charles T. Horngren, Louis Beaubien, Chris Graham

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