Variances from activity-based costs. Assume Texas Instruments uses activity-based costing for variable overhead costs. For July, it has three cost drivers with the following standard and actual amounts for 10,000 units of output.
|
Activity Center
|
Cost Driver
|
Standard Rate per Cost Driver Unit
|
Standard Input for 10,000 Units of Output
|
Actual Costs
|
Actual Number of Inputs Used
|
|
Quality
|
Test minutes
|
$0.50
|
40,000 test
|
$20,000
|
42,000 test
|
|
testing
|
|
|
minutes
|
|
minutes
|
|
Energy
|
Machine hours
|
$1.00
|
40,000 machine
|
$40,000
|
38,000 machine
|
|
|
|
|
hours
|
|
hours
|
|
Indirect labor
|
Direct labor hours
|
$1.00
|
60,000 labor hours
|
$56,800
|
61,000 labor hours
|
Prepare an analysis of the variances like that in Exhibit 10.11.
Text Book: Fundamentals of Cost Accounting 2nd Edition.