Sydney, Inc. uses flexible budgets. At normal capacity of 8,000 units, budgeted manufacturing overhead is $64,000 variable and $180,000 fixed. If Sydney had actual overhead costs of $250,000 for 9,000 units produced, what is the difference between actual and budgeted costs?

a.) $2,000 favorable / b.) $8,000 favorable / c.)$6,000 unfavorable / d.) $2,000 unfavorable

Kevin Jarvis Industries produced 128,000 units in 60,000 direct labor hours. Production for the period was estimated at 132,000 units and 66,000 direct labor hours. A flexible budget would compare budgeted costs and actual costs, respectively, at:

a.) 60,000 hours and 60,000 hours. / b.) 64,000 hours and 60,000 hours. / c.) 64,000 hours and 66,000 hours. d.) 66,000 hours and 60,000 hours.

If an investment center has a $30,000 controllable margin and $400,000 of sales, what average operating assets are needed to have a return on investment of 10%?

a.) $300,000 / b.) $400,000 / c.) $40,000 / d.) $50,000

The flexible budget

a.) is a series of static budgets at different levels of activity. / b.) is prepared before the master budget. / c.) is relevant both within and outside the relevant range. d.) eliminates the need for a master budget.

At 9,000 direct labor hours, the flexible budget for indirect materials is $18,000. If $18,700 are incurred at 9,200 direct labor hours, the flexible budget report should show the following difference for indirect materials:

a.) $700 favorable. / b.) $700 unfavorable. / c.) $300 unfavorable / d.) $300 favorable.