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1. Compute the overhead variances for the year: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance. 2. Explain why the variances are favorable or unfavorable.

1. Compute the overhead variances for the year: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance. 2. Explain why the variances are favorable or unfavorable.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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ri cy Requirements 1. Compute the overhead variances for the year: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance. 2. Explain why the variances are favorable or unfavorable. Print Done I
Transcribed Image Text:ri cy Requirements 1. Compute the overhead variances for the year: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance. 2. Explain why the variances are favorable or unfavorable. Print Done I
Mason Fender uses a standard cost system and provide the following information: (Click the icon to view the information.) Mason Fender allocates manufacturing overhead to production based on standard direct labor hours. Mason Fender reported the following actual results for 2024 actual number of fenders produced, 20,000, actual variable overhead, $5,350; actual fixed overhead, $26,000, actual direct labor hours, 460 Read the requirements Requirement 1. Compute the overhead variances for the year: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance and fixed overhead volume variance. Begin with the variable overhead cost and efficiency variances. Select the required formulas compute the variable overhead cost and efficiency variances and identify whether each variance is favorable (F) or unfavorable (U) (You may need to simply the formula based on the data provided. Abbreviations used AC actual cost AQ-actual quantity, FOH = Exed overhead, SC standard cost SQ standard quantity: VOH-variable overhead) Formula VOH cost variance VOH efficiency variance Variance Static budget variable overhead Static budget fixed overhead Static budget direct labor hours Static budget number of units Standard direct labor hours Print $2,300 $23,000 575 hours 23,000 units 0.025 hours per fender Done my
Transcribed Image Text:Mason Fender uses a standard cost system and provide the following information: (Click the icon to view the information.) Mason Fender allocates manufacturing overhead to production based on standard direct labor hours. Mason Fender reported the following actual results for 2024 actual number of fenders produced, 20,000, actual variable overhead, $5,350; actual fixed overhead, $26,000, actual direct labor hours, 460 Read the requirements Requirement 1. Compute the overhead variances for the year: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance and fixed overhead volume variance. Begin with the variable overhead cost and efficiency variances. Select the required formulas compute the variable overhead cost and efficiency variances and identify whether each variance is favorable (F) or unfavorable (U) (You may need to simply the formula based on the data provided. Abbreviations used AC actual cost AQ-actual quantity, FOH = Exed overhead, SC standard cost SQ standard quantity: VOH-variable overhead) Formula VOH cost variance VOH efficiency variance Variance Static budget variable overhead Static budget fixed overhead Static budget direct labor hours Static budget number of units Standard direct labor hours Print $2,300 $23,000 575 hours 23,000 units 0.025 hours per fender Done my
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