Lantern Corporation recently prepared a manufacturing cost budget for an output of 50,000 units, as...
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Accounting
Lantern Corporation recently prepared a manufacturing cost budget for an output of 50,000 units, as follows:
Direct Materials $100,000
Director labor $50,000
Variable overhead $75,000
Fixed overhead $100,000.
Actual units produced amounted to 60,000. Actual costs incurred were: direct materials, $110,000; direct labor, $60,000; variable overhead, $100,000; and fixed overhead, $97,000. If Lantern evaluated performance by the use of a flexible budget, a performance report would reveal a total variance of $3,000 favorable. How do you arrive at this answer?
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