Selected Information from Richards Company's Flexible Budget Is Presented Below

question 112

Essay

Selected information from Richards Company's flexible budget is presented below:



Richards Company applies overhead to production at a rate of $31.25 per unit based on a normal operating level of 80% of capacity. For the current period, Richards Company produced 5,400 units and incurred $62,000 of fixed overhead costs and $96,000 of variable overhead costs. The company used 11,000 labor hours to produce the 5,400 units. Calculate the variable overhead spending and efficiency variances, and the fixed overhead spending and volume variances. Indicate whether each variance is favorable or unfavorable.

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Definitions:

HEXACO Model

A personality model that expands upon the traditional Big Five traits by including a sixth dimension: Honesty-Humility, alongside Emotionality, eXtraversion, Agreeableness, Conscientiousness, and Openness to experience.

Personality Factors

Fundamental traits or dimensions that constitute an individual's personality, often identified through factor analysis in personality psychology.

Needs-Hierarchy Theory

A psychological theory proposed by Abraham Maslow that categorizes human needs into five hierarchical levels, from basic physiological needs to self-actualization.

Gratified

Having given pleasure or satisfaction; in psychological terms, it often relates to the fulfillment of a desire or need.