Activity: Analysis of imputation differences in rational full cost Management Accounting - Collge Boral 1 Exercise: Analysis of imputation differences in rational full cost Mr. Million, owner of the company Solide, has lost his accountant who has decided to retire. Analyzing the data left by the accountant, Mr. Million finds himself a little helpless. He then asks you to analyze the data for him. FGF annual budget Workshop A Workshop B Total FGF - variables $ 20,000 $ 50,000 $ 70,000 FGF - fixed $ 105,000 $ 300,000 $ 405,000 FGF - total $ 125,000 $ 350,000 $ 475,000 MOD Hours 50,000 Machine hours 50,000 The charge rates are calculated based on machine hours in shop A and on direct labor hours in shop B. The accountant had budgeted for Shop B's manufacturing overheads based on a planned machine shutdown in August and the machines restarted in early September. The restart costs were estimated at $ 49,500 and this charge was included in the budgeted fixed manufacturing overhead. However, some customers demanded that delivery times be met and, in response, Mr. Million asked his employees to spread their vacations over the summer period. He hired three students to fill vacancies left by vacationing employees, avoiding machinery downtime during August. Real costs incurred during the year: Workshop A Workshop B Total FGF - variables $ 19,000 $ 52,000 $ 71,000 FGF - fixed $ 107,000 $ 250,500 $ 357,500 FGF - total $ 126,000 $ 302,500 $ 428,500 MOD Hours 46,500 Machine hours 48,000 Since the direct labor charge was only $ 10,000 higher than expected, Mr. Million believes the decision to avoid shutting down the machines and then restarting them in September was very important. beneficial for his business.