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15 November, 19:21

Chambers, inc. uses flexible budgets. at normal capacity of 16,000 units, budgeted manufacturing overhead is: $64,000 variable and $180,000 fixed. if chambers had actual overhead costs of $250,000 for 18,000 units produced, what is the difference between actual and budgeted costs?

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  1. 15 November, 21:09
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    The total budgeted cost is the sum of the variable cost and fixed cost.

    Total budgeted cost = ($64,000) + ($180,000) = $244,000

    Solving for each unit, the budgeted cost will be $15.25/unit

    Now, calculating for the actual cost per unit,

    actual cot = ($250,000) / 18 = $13.88/unit

    The difference between the two costs is approximately $1.37.
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