Buckingham Company Buckingham Company Uses a Standard Cost System for Its Production

question 80

Multiple Choice

Buckingham Company
Buckingham Company uses a standard cost system for its production process and applies overhead based on direct labor hours.The following information is available for May when Buckingham produced 4,500 units:

• A)$3,125 F
• B)$3,875 U
• C)$3,875 F
• D)$6,062 U

Standard:
DLH per unit	2.50
Variable overhead per DLH	$1.75
Fixed overhead per DLH	$3.10
Budgeted variable overhead	$21,875
Budgeted fixed overhead	$38,750

Actual:
Direct labor hours	10,000
Variable overhead	$26,250
Fixed overhead	$38,000

Refer to Buckingham Company.Using the two-variance approach,what is the noncontrollable variance?

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Definitions:

Sales Forecast

A projected calculation of future sales, often based on historical sales data, market trends, and economic conditions.

Growth

An increase in the economic value of a company or economy, often measured by variables such as income, sales, or GDP.

Sales

The total amount of goods or services that are sold within a particular period of time.

Operating Budget

A detailed projection of all estimated income and expenses based on forecasted sales revenue during a given period, usually a fiscal year.