The Most Recent Operating Budget for Gilligan Company Is Based

question 20

Essay

The most recent operating budget for Gilligan Company is based on production of 42,000 units with 1.0 machine hour allowed per unit. Variable manufacturing overhead is anticipated to be $20 per unit. Actual production was 45,000 units using 40,000 machine hours. Actual variable cost was $725,000.
Required:
Compute the commonly used variances for a variable overhead report. Do not prepare the report.

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Definitions:

Procurement

The process of finding, acquiring, buying goods, services, or works from an external source, often via a tendering or competitive bidding process.

Operations

The day-to-day activities required for the ongoing production of goods or services.

Inputs and Outputs

Inputs are the resources (such as labor, raw materials, and energy) used in the production process, while outputs are the products or services generated.

Competitive Strategy

Approaches that a company takes to attract customers, withstand competitive pressures, and strengthen an organization’s market position.