5. Java Hill planned to have $108000 in indirect production expenses related to the electricity used by the coffee roasters. It spent $84000 0n electricity. Java Hill has green initiatives, and the operation manager feels he should win an award for reducing electricity use. Using the sales figures from the previous question, calculate whether indirect production expenses were over or under-applied and state whether you think the production manager deserves the award.

Java Hill planned to have $108000 in indirect production expenses related to the electricity used by the coffee roasters. It spent $84000 0n electricity. Java Hill has green initiatives, and the operation manager feels he should win an award for reducing electricity use.

Using the sales figures from the previous question, calculate whether indirect production expenses were over or under-applied and the state whether you think the production manager deserves the award.

Use this information

Actual Units 600,000.00 Budgeted Units 900,000.00 Budgeted Price 2.50 Actual Price 4.00 Sales volume variance ( Actual units sold - Budgeted units sold ) * Budgeted price per unit (600000-900000)*2.50 300000*2.50 750,000.00 Unfavourable Sales price variance = (Actual price - Budgeted price ) * Actual units sold (4-2.50)*600000 1.5*600000 900,000.00 Unfavourable