Question 2.1

TeleTube Inc. manufacturers TVs. Unfortunately, some of the company's data was misplaced by an IT error. Use the following information to replace the lost data:

Analysis	Actual Results	Flexible Variances	Flexible Budget	Sales- Volume Variances	Static Budget
Units Sold	112,500		112,500		103,125
Revenues	$42,080	$1,000 F	(A)	$1,400 U	(B)
Variable Costs	(C)	$200 U	$15,860	$2,340 F	$18,200
Fixed Costs	$8,280	$860 F	$9,140		$9,140
Operating Income	$17,740	(D)	$16,080	(E)	$15,140

Required

1. What are the respective flexible-budget revenues (A)?
2. What are the static-budget revenues (B)?
3. What are the actual variable costs (C)
4. What is the total flexible-budget variance (D)?
5. What is the total sales-volume variance (E)?
6. What is the total static-budget variance?

Question 2.2

The following data for the Golden Garden Company (GGC) pertains to the production of 2,500 garden spades during April. The spade consists of a wooden handle and a metal forged tool that comes in contact with the ground.

Direct Materials (all materials purchased were used):

• Standard cost: $1.00 per handle and $3.50 per metal tool
• Total actual cost: $11,350.
• Materials flexible-budget efficiency variance was $650 unfavourable.

Direct Manufacturing Labour:

• Standard cost is 5 garden spades per hour at $20.00 per hour.
• Actual cost per hour was $21.00
• Labour efficiency variance was $400 favourable.

Required

1. What is the standard direct material amount per garden spade?
2. What is the standard cost allowed for all units produced?
3. What is the total direct materials flexible-budget variance?
4. What is the direct material flexible-budget rate variance?
5. What is the total actual cost of direct manufacturing labour?
6. What is the labour rate variance for direct manufacturing labour?

Question 2.3

Rose Apothecary manufactures individual shampoos for hotel/motel clientele. The fixed manufacturing overhead costs for 2021 will total $576,000. The company uses good units finished for fixed overhead allocation and anticipates 300,000 units of production. Good units finished average 92 percent of total units produced. During January, 20,000 units were produced. Actual fixed overhead cost per good unit averaged $2.82 in January.

Required

1. Determine the fixed overhead rate for 2021.
2. Determine the fixed overhead static-budget variance for January.
3. Determine the fixed overhead production-volume variance for January.
4. Determine the fixed overhead rate variance for January.

Question 2.4

OG Anunoby Corporation produces a special line of basketball hoops in batches. To manufacture a batch of the basketball hoops OG Anunoby Corporation must setup the machines and moulds. Setup costs are batch-level costs because they are associated with batches rather than individual units of products. A separate Setup Department is responsible for setting up machines and moulds for different styles of basketball hoops

Setup overhead costs consist of some costs that are variable and some costs that are fixed with respect to the number of setup hours. The following information pertains to January.

	Static-budget Amounts	Actual Amounts
Basketball hoops produced and sold	30,000	28,000
Batch size (number of units per batch)	200	250
Setup hours per batch	5	4
Variable overhead cost per setup hour	$10	$9
Total fixed setup overhead costs	$22,500	$21,000

Required

1. Calculate the efficiency variance for variable setup overhead costs.
2. Calculate the rate variance for variable setup overhead costs.
3. Calculate the flexible-budget variance for variable setup overhead costs.
4. Calculate the rate variance for fixed setup overhead costs.
5. Calculate the production-volume variance for fixed setup overhead costs.