3. Compute the fixed overhead spending and volume variances. Spending Variance $4 Volume Variance 4. Compute the variable overhead spending and efficiency variances. Spending Variance Efficiency Variance %24 %24

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Direct Materials, Direct Labor, and Overhead Variances, Journal Entries

Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following standard cost sheet:

Direct materials (5 lbs. @ $2.60) $13.00
Direct labor (0.75 hr. @ $18.00) 13.50
Fixed overhead (0.75 hr. @ $4.00) 3.00
Variable overhead (0.75 hr. @ $3.00) 2.25
   Standard cost per unit $31.75

Algers computes its overhead rates using practical volume, which is 54,000 units. The actual results for the year are as follows:

  1. Units produced: 53,000
  2. Direct materials purchased: 274,000 pounds at $2.50 per pound
  3. Direct materials used: 270,300 pounds
  4. Direct labor: 40,100 hours at $17.95 per hour
  5. Fixed overhead: $161,700
  6. Variable overhead: $122,000
3. Compute the fixed overhead spending and volume variances.
Spending Variance
Volume Variance
4. Compute the variable overhead spending and efficiency variances.
Spending Variance
Efficiency Variance
%24
Transcribed Image Text:3. Compute the fixed overhead spending and volume variances. Spending Variance Volume Variance 4. Compute the variable overhead spending and efficiency variances. Spending Variance Efficiency Variance %24
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