Exhibit 11-11 Activity-Based Flexible Budget: DCdesserts.com DC desserts DCDESSERTS.COM Waxed paper Monthly Flexible Overhead Budget Budgeted Cost Level of Activity Cost Pool I (cost driver: process hours) 6,000 7,500 9,000 Indirect material: Nonstick cooking spray $12.000 $15.000 $18.000 2,000 2.500 3,000 Other paper products 2.000 2.500 3.000 Miscellaneous supplies 6.000 7,500 9.000 Indirect labor: maintenance 4.000 5.000 6.000 Utilities: Electricity 3.000 3.750 4.500 Natural gas 1.000 1.250 1,500 Total of cost pool I $30.000 $37.500 $45.000 Cost Pool II (cost driver: production runs) 8 12 16 Indirect labor: Inspection $ 2.200 $ 3,300 $ 4.400 Setup 3.000 4.500 6.000 Total of cost pool II $ 5.200 $ 7.800 $10,400 Cost Pool III (cost driver: new products tested) 20 30 40 Test kitchen $ 1.200 $ 1.800 $ 2.400 Total of cost pool III $ 1,200 $ 1.800 $ 2,400 Cost Pool IV (cost driver: pounds of material handled) 20,000 30,000 40,000 Material handling $ 2.000 $ 3.000 $ 4.000 Total of cost pool IV $ 2.000 $ 3.000 $ 4.000 Cost Pool V (facility level costs) Indirect labor: production supervisors $ 6.000 S 6.000 $ 6.000 Depreciation: plant and equipment 500 500 500 Insurance and property taxes 100 100 100 Total of cost pool V $ 6.600 $ 6,600 $ 6.600 Total overhead cost $45,000 $56,700 $68,400 Refer to DCdesserts.com's activity-based flexible budget in Exhibit 11-11 Suppose that the company's activity in June is described as follows: Process hours Production runs New products tested Direct material handled (pounds) 9,000 8 40 30,000 Required: 1. Determine the flexible budgeted cost for each item in the table below. 2-a. Compute the variance for setup cost during the month, assuming that the actual setup cost was $3,000. Use the activity-based flexible budget. 2-b. Compute the variance for setup cost during the month, assuming that the actual setup cost was $3,000. Use DCdesserts.com's conventional flexible budget (Exhibit 11-3). Answer is not complete. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Req 2B Determine the flexible budgeted cost for each item in the table below. a. b. C. Indirect material Utilities Inspection Test kitchen Material handling Total overhead cost d. S 1,800 e. f. 45000- 64800 Req 1 Req 2A > Exhibit 11-3 Flexible Overhead Budget DC desserts FILE HOME VIEW Sign in F29 DCdesserts - Excel INSERT PAGE LAYOUT FORMULAS DATA REVIEW X fx =F17F28 A B D DCDESSERTS.COM Monthly Flexible Overhead Budget E F . CO 00 ON AN - Cost per Hour Process Hours 7,500 6,000 9,000 $ 2.00 $ 0.33 0.33 1.00 0.67 12,000 $ 15,000 $ 18,000 2,000 2,500 3,000 2,000 2,500 3,000 6,000 7,500 9,000 5,000 6,000 4,000 0.50 0.17 5 Budgeted Overhead Costs 6 7 Variable overhead costs: 8 Indirect material: 9 Nonstick cooking spray 10 Waxed paper 11 Other paper products 12 Miscellaneous supplies 13 Indirect labor. maintenance 14 Utilities 15 Electricity 16 Natural gas 17 Total variable overhead cost 18 19 Fixed overhead costs: 20 Indirect labor 21 Inspection 22 Production supervisors 23 Setup specialists 24 Material handling 25 Depreciation: plant and equipment 26 Insurance and property taxes 27 Test kitchen 28 Total fixed overhead cost 29 Total overhead cost 3,000 3,750 4,500 1,000 1,250 1,500 $ 30,000 $ 37,500 $ 45,000 $ $ 2,200 $ 2,200 $ 2,200 6,000 6,000 6,000 3,000 3,000 3,000 2,000 2,000 2,000 500 500 500 100 100 100 1,200 1,200 1,200 15,000 $ 15,000 $15,000 45,000 $ 52,500 $ 60,000 $ $ 30 Flexible Overhead Budget READY 145% Exhibit 11-11 Activity-Based Flexible Budget: DCdesserts.com DC desserts DCDESSERTS.COM Waxed paper Monthly Flexible Overhead Budget Budgeted Cost Level of Activity Cost Pool I (cost driver: process hours) 6,000 7,500 9,000 Indirect material: Nonstick cooking spray $12.000 $15.000 $18.000 2,000 2.500 3,000 Other paper products 2.000 2.500 3.000 Miscellaneous supplies 6.000 7,500 9.000 Indirect labor: maintenance 4.000 5.000 6.000 Utilities: Electricity 3.000 3.750 4.500 Natural gas 1.000 1.250 1,500 Total of cost pool I $30.000 $37.500 $45.000 Cost Pool II (cost driver: production runs) 8 12 16 Indirect labor: Inspection $ 2.200 $ 3,300 $ 4.400 Setup 3.000 4.500 6.000 Total of cost pool II $ 5.200 $ 7.800 $10,400 Cost Pool III (cost driver: new products tested) 20 30 40 Test kitchen $ 1.200 $ 1.800 $ 2.400 Total of cost pool III $ 1,200 $ 1.800 $ 2,400 Cost Pool IV (cost driver: pounds of material handled) 20,000 30,000 40,000 Material handling $ 2.000 $ 3.000 $ 4.000 Total of cost pool IV $ 2.000 $ 3.000 $ 4.000 Cost Pool V (facility level costs) Indirect labor: production supervisors $ 6.000 S 6.000 $ 6.000 Depreciation: plant and equipment 500 500 500 Insurance and property taxes 100 100 100 Total of cost pool V $ 6.600 $ 6,600 $ 6.600 Total overhead cost $45,000 $56,700 $68,400 Refer to DCdesserts.com's activity-based flexible budget in Exhibit 11-11 Suppose that the company's activity in June is described as follows: Process hours Production runs New products tested Direct material handled (pounds) 9,000 8 40 30,000 Required: 1. Determine the flexible budgeted cost for each item in the table below. 2-a. Compute the variance for setup cost during the month, assuming that the actual setup cost was $3,000. Use the activity-based flexible budget. 2-b. Compute the variance for setup cost during the month, assuming that the actual setup cost was $3,000. Use DCdesserts.com's conventional flexible budget (Exhibit 11-3). Answer is not complete. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Req 2B Determine the flexible budgeted cost for each item in the table below. a. b. C. Indirect material Utilities Inspection Test kitchen Material handling Total overhead cost d. S 1,800 e. f. 45000- 64800 Req 1 Req 2A > Exhibit 11-3 Flexible Overhead Budget DC desserts FILE HOME VIEW Sign in F29 DCdesserts - Excel INSERT PAGE LAYOUT FORMULAS DATA REVIEW X fx =F17F28 A B D DCDESSERTS.COM Monthly Flexible Overhead Budget E F . CO 00 ON AN - Cost per Hour Process Hours 7,500 6,000 9,000 $ 2.00 $ 0.33 0.33 1.00 0.67 12,000 $ 15,000 $ 18,000 2,000 2,500 3,000 2,000 2,500 3,000 6,000 7,500 9,000 5,000 6,000 4,000 0.50 0.17 5 Budgeted Overhead Costs 6 7 Variable overhead costs: 8 Indirect material: 9 Nonstick cooking spray 10 Waxed paper 11 Other paper products 12 Miscellaneous supplies 13 Indirect labor. maintenance 14 Utilities 15 Electricity 16 Natural gas 17 Total variable overhead cost 18 19 Fixed overhead costs: 20 Indirect labor 21 Inspection 22 Production supervisors 23 Setup specialists 24 Material handling 25 Depreciation: plant and equipment 26 Insurance and property taxes 27 Test kitchen 28 Total fixed overhead cost 29 Total overhead cost 3,000 3,750 4,500 1,000 1,250 1,500 $ 30,000 $ 37,500 $ 45,000 $ $ 2,200 $ 2,200 $ 2,200 6,000 6,000 6,000 3,000 3,000 3,000 2,000 2,000 2,000 500 500 500 100 100 100 1,200 1,200 1,200 15,000 $ 15,000 $15,000 45,000 $ 52,500 $ 60,000 $ $ 30 Flexible Overhead Budget READY 145%