Using the Following Information, Prepare a Factory Overhead Flexible Budget

question 152

Essay

Using the following information, prepare a factory overhead flexible budget for Andover Company where the total factory overhead cost is $75,500 at normal capacity 100%.Include capacity at 75%, 90%, 100%, and 110%.Total variable cost is $6.25 per unit and total fixed costs are $38,000.The information is for month ended August

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Definitions:

Revenue

The total amount of money received by a company for goods sold or services provided during a specific period.

Effective Capacity

The capacity a firm can expect to achieve, given its product mix, methods of scheduling, maintenance, and standards of quality.

Operating Constraints

Limitations or restrictions that affect the performance or output of a process or system.

Maximum Output

The highest level of production that a company can sustain with the current resources and technologies.