Refer to Recovery Solutions, Inc

question 29

Essay

Refer to Recovery Solutions, Inc. Perform DuPont analysis for 2015 and 2014, showing all three components. Assume that total assets and total stockholders' equity at June 30, 2013, were $1,250,000 and 969,000, respectively.

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Definitions:

Overhead Controllable Variance

The difference between the actual and budgeted overhead costs that management has control over, indicative of operational efficiency.

Overhead Volume Variance

The difference between the budgeted manufacturing overhead for the actual production volume and the actual manufacturing overhead incurred.

Two-Variance Analysis

An analytical technique in managerial accounting where variances between expected and actual performance are divided into a volume variance and a rate or efficiency variance.

Overhead Controllable

Expenses incurred in the running of a business that management can directly influence or control, such as supplies and advertising.