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tealraven495Lv1
28 Sep 2019
E23-20 Computing overhead variances
Grand Fender is acompetitor of Pro Fender. Grand Fender alsouses a standard cost system and provides the followinginformation:
Static budget variable overhead $5,630 Static budget fixed overhead $22,520 Static budget direct labor hours 563 hours Static budget number of units 21,000 units Standard direct labor hours 0.026 hours per fender
Grand Fender allocates manufacturing overhead to productionbased on standard direct labor hours. Grand Fender reported thefollowing actual results for 2016: actual number of fendersproduced, 20,000; actual variable overhead, $5,200; actual fixedoverhead, $24,000; actual direct labor hours, 480.
Requirements
1. Compute the overhead variance for the year: variable overheadcost variance, variable overhead efficiency variance, fixedoverhead cost variance, and fixed overhead volume variance.
2. Explain why the variances are favorable or unfavorable
E23-20 Computing overhead variances
Grand Fender is acompetitor of Pro Fender. Grand Fender alsouses a standard cost system and provides the followinginformation:
Static budget variable overhead | $5,630 |
Static budget fixed overhead | $22,520 |
Static budget direct labor hours | 563 hours |
Static budget number of units | 21,000 units |
Standard direct labor hours | 0.026 hours per fender |
Grand Fender allocates manufacturing overhead to productionbased on standard direct labor hours. Grand Fender reported thefollowing actual results for 2016: actual number of fendersproduced, 20,000; actual variable overhead, $5,200; actual fixedoverhead, $24,000; actual direct labor hours, 480.
Requirements
1. Compute the overhead variance for the year: variable overheadcost variance, variable overhead efficiency variance, fixedoverhead cost variance, and fixed overhead volume variance.
2. Explain why the variances are favorable or unfavorable
Sixta KovacekLv2
28 Sep 2019