PART ONE Bluecap Co uses a standard cost system and flexible budgets for control purposes The following budgeted information pertains to 2019 Denominator volumenumber of units 6,000 Denominator volumepercent of capacity 60 Denominator volumestandard direct labor hours (DLHs) 24,000 Budgeted variable factory overhead cost at denominator volume $ 103,200 Total standard factory overhead rate per DLH $ 15 10 During 2019, Bluecap worked 37,000 DLHs and manufactured 9,600 units The actual factory overhead cost for the year was $14,000 greater than the flexible budget amount for the units produced, of which $8,000 was due to fixed factory overhead In preparing a budget for 2020 Bluecap decided to raise the level of operation to 90 of capacity (a level it considers to be practical capacity ), to manufacture 9,000 units at a budgeted total of 27,000 DLHs The total factory overhead spending variance in 2019 (to the nearest whole dollar), based on a three variance breakdown (decomposition) of the total overhead variance for Bluecap Co , was (Round your intermediate calculation to 2 decimal places ) Multiple Choice $5,780 favorable $14,020 unfavorable $17,620 favorable $19,860 favorable $20,020 unfavorable PART TWO Armer Company is accumulating data to use in preparing its annual profit plan for the coming year The cost behavior pattern of the maintenance costs must be determined The accounting staff has suggested the use of linear regression to derive an equation for maintenance hours and costs Data regarding the maintenance hours and costs for the last year and the results of the regression analysis follow Month Maintenance Cost Machine Hours Jan $ 4,900 760 Feb 3,700 600 Mar 4,300 680 Apr 3,520 580 May 5,050 780 June 3,660 590 July 3,730 600 Aug 5,170 860 Sept 4,960 770 Oct 4,750 750 Nov 4,000 630 Dec 3,860 620 Sum $ 51,600 8,220 Average $ 4,300 $ 685 Average cost per hour $ 6 00 a (intercept) $ 158 4112 b (coefficient) 6 5086 Standard error of the estimate 114 5939 R squared 0 9695 t value for b 17 8257 If Armer Company uses the high low method of analysis, the equation for the relationship between hours of activity and maintenance cost follows (Do not round intermediate calculations ) Multiple Choice y 685 6 0 x y 102 5 9 x y 4,300 685 x y 102 6 x None of these answer choices are correct

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PART ONE Bluecap Co. uses a standard cost system and flexible budgets for control purposes. The following budgeted information pertains to 2019: Denominator volumenumber of

PART ONE

Bluecap Co. uses a standard cost system and flexible budgets for control purposes. The following budgeted information pertains to 2019:


Denominator volumenumber of units		6,000
Denominator volumepercent of capacity		60	%
Denominator volumestandard direct labor hours (DLHs)		24,000
Budgeted variable factory overhead cost at denominator volume	$	103,200
Total standard factory overhead rate per DLH	$	15.10

During 2019, Bluecap worked 37,000 DLHs and manufactured 9,600 units. The actual factory overhead cost for the year was $14,000 greater than the flexible budget amount for the units produced, of which $8,000 was due to fixed factory overhead. In preparing a budget for 2020 Bluecap decided to raise the level of operation to 90% of capacity (a level it considers to be "practical capacity"), to manufacture 9,000 units at a budgeted total of 27,000 DLHs. The total factory overhead spending variance in 2019 (to the nearest whole dollar), based on a three-variance breakdown (decomposition) of the total overhead variance for Bluecap Co., was: (Round your intermediate calculation to 2 decimal places.)

Multiple Choice

$5,780 favorable.
$14,020 unfavorable.
$17,620 favorable.
$19,860 favorable.
$20,020 unfavorable.

PART TWO

Armer Company is accumulating data to use in preparing its annual profit plan for the coming year. The cost behavior pattern of the maintenance costs must be determined. The accounting staff has suggested the use of linear regression to derive an equation for maintenance hours and costs. Data regarding the maintenance hours and costs for the last year and the results of the regression analysis follow:

Month	Maintenance Cost		Machine Hours
Jan.	$	4,900		760
Feb.		3,700		600
Mar.		4,300		680
Apr.		3,520		580
May		5,050		780
June		3,660		590
July		3,730		600
Aug.		5,170		860
Sept.		4,960		770
Oct.		4,750		750
Nov.		4,000		630
Dec.		3,860		620
Sum	$	51,600		8,220
Average	$	4,300	$	685
Average cost per hour			$	6.00
a (intercept)			$	-158.4112
b (coefficient)				6.5086
Standard error of the estimate				114.5939
R-squared				0.9695
t-value for b				17.8257

If Armer Company uses the high-low method of analysis, the equation for the relationship between hours of activity and maintenance cost follows: (Do not round intermediate calculations.)

Multiple Choice