Chapter $22$ Homework

Computing Activity Variance and Flexible Budget Variance

Burt's Bees, owned by the Clorox Company, manufacturers a number of skin products. Assume that the company compiled the following budgeted manufacturing cost information for a line of lip balm.

$\backslash$table$[[$Budgeted Costs,$],[$Variable costs:,,$],[$Direct materials,$$7\mathrm{.}20,$per case$],[$Direct labor,$$3\mathrm{.}60,$per case$],[$Variable overhead,$$12\mathrm{.}00,$per case$],[$Fixed costs:,$$192,000,]]$

Management budgets production of $10,000$ cases for the month of June but actually produced $9,500$ cases. Actual costs were as follows: direct materials, $$69,600,$ direct labor, $$33,600$; variable overhead $$126,000$; and fixed costs, $$189,600.$

REQUIRED

a$.$ Prepare a variance analysis.

Note: Do not use negative signs with your answers.

$\backslash$table$[[,,$Static Budget,,Activity Variance,,,,Flexible Budget,Flexible Budget Variance,,,Actual,,Static $($Total$)$ Variance,,$],[$Units $($in cases$),,10,000vv,,,,,,x,,,,x,,,,],[$Costs:$],[$Direct materials,$$,0x,$$$,0,$F$,{}^{},$$$,0,0,U{}^{},$$$,0,$$$,0x,$U$,*{*}^{}$