(Flexible and Master Budget) Jones Hardware Division estimated that it would sell 125,000 units this past year. The division planned to ship 1,000 shipments to customers and to utilize 280 m2 of the corporate warehouse during the year. Its estimated overhead costs for the current year were as follows:
|
Materials handling |
$10.50 per 100 units |
|
Inventory storage |
$20.00 per m2 |
|
Shipping |
$15.00 per shipment |
During the year, the division sold 112,000 units in 980 shipments. It utilized 260 m2 of the corporate warehouse. The actual costs for the year were
|
Materials handling |
$12,040 |
|
Inventory storage |
$5,460 |
|
Shipping |
$14,896 |
- Prepare a static and flexible budget for Jones Hardware Division.
- Calculate the price and efficiency variance for each type of overhead cost.