Use the Following Information to Complete Problems Below

Essay

Use the following information to complete Problems below
Komfort Mattress Co. produces foam-topped mattresses and foam mattress pads. The mattress pads were originally designed to be a component of the mattresses (1 pad per mattress). However, the market for mattress pads was profitable enough that management has opted to sell some of the pads on their own. Any pads produced beyond what is necessary to meet the needs of mattress production are sold at market prices. Normally, the transfer cost of the pads is equal to the market sale price. Because of the differentiation strategy, management at Komfort has decided that the Mattress department and the Pads department should be measured and tracked separately. When pads are transferred to the Mattress department, they are inventoried at market prices.
The following information relates to the costs of production for the year for the two departments. Per the company policy, all inventories are kept at stable levels: in other words, sales and production are equal, and purchases of raw materials equal those requisitioned for production.

-Assume that in problem 3, Komfort accepts the order and produces the mattress pads rather than purchasing them. What would be the overall static budget cost variance for the year for the whole company?