Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. alpha company provides financial services to their

Alpha Company provides financial services to their clients. Recently, Alpha has experienced rapid growth rate...

90.2K

Verified Solution

Question

Accounting

image
Alpha Company provides financial services to their clients. Recently, Alpha has experienced rapid growth rate due to expansion and is becoming concerned as to their rising costs, particularly their technology overhead costs. Alpha had determined the cost driver of both their variable and fixed technology overhead costs to be the number of CPU units of their computer usage. Alpha's measure of "production" is the number of client interactions. The technology budget for Alpha for the first quarter of 2022 are as follows: Client interactions Variable Overhead Fixed Overhead 13,000 0.5 CPU units @ $3 per CPU unit $19,500 The actual results for the first quarter of 2022 are: Client interactions 14,500 Variable Overhead $22,000 Fixed Overhead $19,200 CPU units used 7,300 Required: Calculate the variable overhead spending and efficiency variances, and indicate whether each is favourable (F) or unfavourable (U). b. Calculate the fixed overhead spending and production volume variances, and indicate whether each is favourable (F) or unfavourable (U). Comment on Alpha's overhead variances. In your view, is the company right to be worried about its control over technology spending? a. c

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students