Show the variances between the master budget and actual cost

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Reference no: EM13903367

Evaluating nonmanufacturing performance. Nicholson Insurance Company estimates that its overhead costs for policy administration should amount to $80 for each new policy obtained and $2 per year for each $1,000 face amount of insurance outstanding. The company set a budget of selling 6,000 new policies during the coming period. In addition, the company estimated that the total face amount of insurance outstanding for the period would equal $12,000,000.

During the period, actual costs related to new policies amounted to $430,000. The firm sold a total of 6,200 new policies.

The cost of maintaining existing policies was $27,000. Policies worth $13,000,000 were outstanding during the period.

Prepare a schedule to show the variances between the master budget and actual costs for this operation.

Reference no: EM13903367

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