Pizzazz Pizza Inc.'s activity based flexible budget is as follows:

PIZZAZZ PIZZA, INC.

Monthly Flexible Overhead Budget

Budgeted Cost Level of Activity

Cost Pool I (cost driver: process hours) 6,800 8,300 9,800

Indirect material:

Nonstick cooking spray $ 12,800 $ 15,800 $ 18,800

Foil 2,800 3,300 3,800

Other paper products. 2,800 3,300 3,800

Miscellaneous supplies 6,800 8,300 9,800

Indirect labor: maintenance 4,800 5,800 6,800

Utilities:

Electricity 3,800 4,550 5,300

Natural gas 1,800 2,050 2,300

Total of cost pool I $ 35,600 $ 43,100 $ 50,600

Cost Pool II (cost driver: production runs) 16 20 24

Indirect labor:

Inspection $ 3,000 $ 4,100 $ 5,200

Setup 3,800 5,300 6,800

Total of cost pool II $ 6,800 $ 9,400 $ 12,000

Cost Pool III (cost driver: new Pizzas tested) 28 38 48

Test kitchen $ 2,000 $ 2,600 $ 2,480

Total of cost pool III $ 2,000 $ 2,600 $ 2,480

Cost Pool IV (cost driver: pounds of material handled) 28,000 38,000 48,000

Material handling $ 2,800 $ 3,800 $ 4,800

Total of cost pool IV $ 2,800 $ 3,800 $ 4,800

Cost Pool V (facility level costs)

Indirect labor: production supervisors $ 6,800 $ 6,800 $ 6,800

Depreciation: plant and equipment 900 900 900

Insurance and property taxes 500 500 500

Total of cost pool V $ 8,200 $ 8,200 $ 8,200

Total overhead cost $ 55,400 $ 67,100 $ 78,080

Pizzazz's activity for September is as follows:

Process Hours 8,300

Production Runs 24

New Pizza combinations tested 38

Direct material handled (in pounds) 48,000

Required:

1. Determine the flexible budgeted cost for each of the following.

a. Indirect material

b. Utilities

c. Inspection

d. Test kitchen

e. Material handling

f. Total overhead cost

2. Compute the variance for setup cost during the month, assuming that the actual setup cost was $4,600: Using the activity-based flexible budget. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance).)

Flexible budgeted cost:

Indirect material

Utilities

Inspection

Test Kitchen

Material handling

Total overhead cost

Variance for setup cost: