Use the following information for Questions 18 & 1918.19.The Maxit Corporation has a standard costing system in which variable manufacturingoverhead is assigned to production on the basis of standard machine-hours. The following dataare available for July:C.d.The variable overhead efficiency variance for July is:a.$600 Ub.$540 U$540 F$600 F●a.b.Actual variable manufacturing overhead cost incurred: $11,310Actual machine-hours worked: 1,600 hoursVariable overhead rate variance: $1,710 UTotal variable overhead spending variance: $2,310 UThe standard number of machine-hours allowed for July production is closest to:1,600 hours1,700 hoursC.d.1,300 hours1,500 hours

Name: Use the following information for Questions 18 & 1918.19.The Maxit Co
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Description: Use the following information for Questions 18 & 1918.19.The Maxit Corporation has a standard costing system in which variable manufacturingoverhead is assigned to production on the basis of standard machine-hours. The following dataare available fo

The variance is the difference between the actual and standard cost of production data. Total variable overhead variance is equal to sum of variable overhead rate variance and variable overhead efficiency variance. Part 18.Total variable overhead spending variance = $2,310 UVariable overhead rate variance = $1,710 UVariable overhead efficiency variance = Total variable overhead spending variance - Variable overhead rate variance = 2,310 U - 1,710 U = $600 UPart 19.Variable overhead spending variance = AH*AR - SH* SR 2,310 = 11,310 - SH* SR SH*SR = 11,310 - 2,310 = $9,000Variable Overhead efficiency variance = AH*SR - SH*SR600 = 1600 * SR - 9,0001,600*SR = 9,600SR = 9,600/1,600 = $6SH*SR = 9,000SH = 9,000/6 = 1,500 hoursQ18.Option a. $600 U is correct value for overhead efficiency variance.Q19.Option d. 1,500 is the correct value for standard machine hours allowed.

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18. 19. The Maxit Corporation has a standard costing system in which variable manufacturing overhead is assigned to production on the basis of standard machine-hours. The following data are available for July: C. d. The variable overhead efficiency variance for July is: a. $600 U b. $540 U $540 F $600 F a. ● ن و نه ● The standard number of machine-hours allowed for July production is closest to: 1,600 hours 1,700 hours 1,300 hours 5001 b. Actual variable manufacturing overhead cost incurred: $11,310 Actual machine-hours worked: 1,600 hours Variable overhead rate variance: $1,710 U Total variable overhead spending variance: $2,310 U

18. 19. The Maxit Corporation has a standard costing system in which variable manufacturing overhead is assigned to production on the basis of standard machine-hours. The following data are available for July: C. d. The variable overhead efficiency variance for July is: a. $600 U b. $540 U $540 F $600 F a. ● ن و نه ● The standard number of machine-hours allowed for July production is closest to: 1,600 hours 1,700 hours 1,300 hours 5001 b. Actual variable manufacturing overhead cost incurred: $11,310 Actual machine-hours worked: 1,600 hours Variable overhead rate variance: $1,710 U Total variable overhead spending variance: $2,310 U

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

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