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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Cornerstone Exercise 11-28Â Â Â Â Â Â Â Â Â Â Â Â Activity Flexible Budget
Jarend Company provided information on the following four overhead  activities.
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|
Activity |
Driver |
Fixed Cost |
Variable Rate |
|
Maintenance |
Machine hours |
$50,000 |
$ Â 1.80 |
|
Machining |
Machine hours |
25,000 |
3.00 |
|
Setting up |
Setups |
— |
2,100 |
|
Purchasing |
Purchase Orders |
75,000 |
7.00 |
Jarend has found that the following driver levels are associated with two different levels of production.
Driver                             40,000 units            60,000 units
Â
|
Machine hours |
60,000 |
90,000 |
|
Setups |
50 |
70 |
|
Purchase orders |
12,000 |
18,000 |
Required:
Prepare an activity-based flexible budget for 40,000 units and 60,000 units.
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