Using the Following Information, Prepare a Factory Overhead Flexible Budget

question 69

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 31, 2012. (Hint: Determine units produced at normal capacity.)

---

Definitions:

Federal Funds

Funds in a bank’s reserve account at the Federal Reserve Bank.

SEC Registration

The process by which securities are registered with the Securities and Exchange Commission, a requirement for securities to be legally sold to the public in the United States.

Commercial Paper

An unsecured, short-term debt instrument issued by a corporation, typically for financing short-term liabilities, with maturities ranging from a few days to 270 days.