Calculate the companys total cost variance for variable

Reference no: EM13391229

Jackson Company's static budget for variable overhead and fixed overhead revealed the following information for 25,000 hours of activity: variable overhead, $150,000; fixed overhead, $200,000.

The company actually worked 30,000 hours, and actual overhead incurred was: variable, $190,000; fixed, $230,000

Required:

a. Compute the company's total cost variance for variable overhead and fixed overhead if the firm uses a static budget to help assess performance
b. Repeat part "a" assuming the use of a flexible budget.
c. Which of the two budgets (static or flexible) is preferred in performance evaluations? Why?

Reference no: EM13391229

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