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Bridgestone Company Has Developed the Following Flexible Budget Formulas for Its

question 16

Multiple Choice

Bridgestone Company has developed the following flexible budget formulas for its four overhead items:
Bridgestone normally produces 10,000 units (each unit requires 0.10 direct labour hours) ; however, this year 15,000 units were produced with the following actual costs:
$Bridgestone Company has developed the following flexible budget formulas for its four overhead items: Bridgestone normally produces 10,000 units (each unit requires 0.10 direct labour hours) ; however, this year 15,000 units were produced with the following actual costs: \begin{array}{ll}\text { Overhead item }&\text { Actual costs }\\ \text { Maintenance } & \$ 14,000 \\ \text { Power } & \$ 3,600 \\ \text { Direct labour } & \$ 16,000 \\ \text { Equipment lease } & \$ 5,000 \end{array} -Refer to the Figure.When using an after-the-fact flexible budget,what is the total budget variance? A) $3,600 U B) $3,600 F C) $5,000 U D) $5,000 F$ $\begin{array}{ll}\text { Overhead item }&\text { Actual costs }\\\text { Maintenance } & \$ 14,000 \\\text { Power } & \$ 3,600 \\\text { Direct labour } & \$ 16,000 \\\text { Equipment lease } & \$ 5,000\end{array}$
-Refer to the Figure.When using an after-the-fact flexible budget,what is the total budget variance?

Definitions:

NORM.DIST

A function in statistics that returns the normal distribution for a specified mean and standard deviation.

Standard Error

The standard deviation of the sampling distribution of a statistic, often used to estimate the precision of a sample mean.

Population Standard Deviation

A measure of the dispersion of a set of data values from their mean, calculated for the entire population.

Sample Size

The number of observations or items selected from a population to constitute a sample for the purpose of statistical analysis.