Classics, SA

question 23

Essay

Classics, SA., uses a flexible budget for overhead costs. The company expects to produce 20,000 units of the product it manufactures. Half of the units require 0.50 direct labour hours per unit. The remainder requires 0.75 direct labour hours per unit. The cost formulas for each of the four overhead items is as follows: Required:
a.
Prepare an overhead budget for the expected activity level for the coming year.
b.
Prepare an overhead budget that reflects production that is 10 per cent higher than expected.

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Definitions:

Battered Spouse Syndrome

A defense to criminal liability available to defendants if they can prove that they believed the only way to escape death or severe bodily injury was to use force against their tormentors.

Self-Defense

A defense to criminal liability available to defendants if they can demonstrate (1) that they did not start the altercation, (2) that they had good reason to believe they were in danger of death or severe bodily injury, and (3) that they used only enough force to repel the attack.

Irresistible Impulse Test

Under this rule, criminal defendants are judged not guilty by reason of insanity if, at the time of the action in question, they suffered from a mental disease that either prevented them from knowing right from wrong or compelled them to commit the criminal act.

Insanity

A legal term referring to a mental dysfunction that exempts individuals from legal responsibility for their actions.