1. If you were to suggest a revision to the budget for December, which cost category seems most in need of revision? Assuming that the fixed cost component of this budgeted cost is already correct, what should the variable cost component be so that the budget equals actual?

Static Budget		Budget	Actual	Difference
Depreciation		$4,000	$4,000	$0
Maintenance		4,800	5,150	(350)
Inspections		3,800	3,790	10
Utilities		4,800	4,900	(100)
Indirect material		1,200	1,350	(150)
Overtime		0	1,125	(1,125)
		$18,600	$20,315	($1,715)
Flexible Budget		Budget	Actual	Difference
Depreciation		$4,000	$4,000	$0
Maintenance		5,150	5,150	0
Inspections		3,925	3,790	135
Utilities		4,900	4,900	0
Indirect material		1,350	1,350	0
Overtime		1,125	1,125	0
		$20,450	$20,315	$135

1a. On a chart, lines are plotting the cost behavior patterns of four of the overhead costs from this problem. Examine the patterns, review the Data Section, and identify below which of the four costs each represents.

a.

b.

c.

c.

Chart Data Table
	0	1000	2000	3000	4000	5000	6000
A	0	250	500	750	1000	1250	1500
B	4000	4000	4000	4000	4000	4000	4000
C	1800	2500	3200	3900	4600	5300	6000
D	0	0	0	0	0	2250	4500