Tylon's Hardware uses a flexible budget to develop planning
Tylon's Hardware uses a flexible budget to develop planning information for its warehouse operations. For 20X2, the company anticipated that it would have 96,000 sales units for 664 customer shipments. Average storage bin usage for various inventories was estimated to be 200 per day. The costs and cost drivers were determined to be as follows:,
Item Fixed Variable Cost driver,
Product handling $10,000 $1.25 per 100 units,
Storage - 3.00 per storage bin,
Utilities 1,000 1.50 per 100 units,
Shipping clerks 1,000 1.00 per shipment,
Supplies - 0.50 per shipment,
During the year, the warehouse processed 90,000 units for 600 customer shipments. The workers used 225 storage bins on average each day to sort, store, and process goods for shipment. The actual costs for 20X2 were:,
Item Actual costs,
Product handling $10,900,
Shipping clerks 1,400,
Question 1: Determine the 20X2 static budget variances. (five points),
Question 2: Determine the 20X2 flexible budget variances. (five points)
This question was answered on: Dec 18, 2020
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