Effectiveness/efficiency; ethics; writing Top management of Capital Services observed that the budget for the EDP department had been growing far beyond what was anticipated for the past several years. Each year, the EDP manager would demonstrate that increased usage by the company’s non-EDP departments would justify a larger appropriation. The administrative vice president commented that she was not surprised because user departments were not charged for the EDP department services, and EDP department personnel were creative and eager to continue expanding services. A review of the current year's statistics of the EDP department revealed the following: Budgetary appropriation $1,600,000 based on 3,200 hours of run time. $1,280,000 of this appropriation is related to fixed costs. Actual department expenses Variable: $296,400 (incurred for 3,120 hours of run time). Fixed: $1,304,000. a. Did the EDP manager stay within his appropriation? Appropriation Answer Actual cost Answer Under(Above) Budget Answer b. What was the EDP department's degree of effectiveness? Note: Round your answer to two decimal places. Answer c. Was the EDP department efficient? Treat variable and fixed expenses separately. Note: Round your answers to the nearest whole dollar. Actual efficiency of variable expenses $Answer per hour Planned efficiency of variable expenses $Answer per hour Actual efficiency of fixed expenses $Answer per hour Planned efficiency of fixed expenses $Answer per hour Was the EDP department efficient regarding variable expenses compared to plan? Answer Was the EDP department efficient regarding fixed expenses compared to plan? Answer d. Using the formulas for analyzing variable and fixed costs, calculate the variances incurred by the EDP department. Note: Do not use negative signs with your answers. Variable spending variance $Answer Answer Variable efficiency variance $Answer Answer Variable total variance $Answer Answer Fixed spending variance $Answer Answer Fixed volume variance $Answer Answer Fixed total variance $Answer Answer
Effectiveness/efficiency; ethics; writing
Top management of Capital Services observed that the budget for the EDP department had been growing far beyond what was anticipated for the past several years. Each year, the EDP manager would demonstrate that increased usage by the company’s non-EDP departments would justify a larger appropriation. The administrative vice president commented that she was not surprised because user departments were not charged for the EDP department services, and EDP department personnel were creative and eager to continue expanding services. A review of the current year's statistics of the EDP department revealed the following:
Budgetary appropriation
$1,600,000 based on 3,200 hours of run time.
$1,280,000 of this appropriation is related to fixed costs.
Actual department expenses
Variable: $296,400 (incurred for 3,120 hours of run time).
Fixed: $1,304,000.
a. Did the EDP manager stay within his appropriation?
| Appropriation | Answer |
| Actual cost | Answer |
| Under(Above) Budget | Answer |
b. What was the EDP department's degree of effectiveness?
Note: Round your answer to two decimal places.
Answer
c. Was the EDP department efficient? Treat variable and fixed expenses separately.
Note: Round your answers to the nearest whole dollar.
Actual efficiency of variable expenses $Answer per hour
Planned efficiency of variable expenses $Answer per hour
Actual efficiency of fixed expenses $Answer per hour
Planned efficiency of fixed expenses $Answer per hour
Was the EDP department efficient regarding variable expenses compared to plan? Answer
Was the EDP department efficient regarding fixed expenses compared to plan? Answer
d. Using the formulas for analyzing variable and fixed costs, calculate the variances incurred by the EDP department.
Note: Do not use negative signs with your answers.
Variable spending variance $Answer Answer
Variable efficiency variance $Answer Answer
Variable total variance $Answer Answer
Fixed spending variance $Answer Answer
Fixed volume variance $Answer Answer
Fixed total variance $Answer Answer
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