Best, Inc. uses a standard cost system and provides the following information. (Click the icon to view the information.) Best allocates manufacturing overhead to production based on standard direct labor hours. Best reported the following actual results for 2024: actual number of units produced, 1,000; actual variable overhead, $3,800; actual fixed overhead, $3,500; actual direct labor hours, 1,400. Read the requirements. Requirement 1. Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances. Begin with the variable overhead cost and efficiency variances. Select the required formulas, compute the variable overhead cost and favorable (F) or unfavorable (U). (Abbreviations used: AC actual cost; AQ = actual quantity: FOH = fixed overhead; SC standard co = = VOH cost variance VOH efficiency variance Now compute the fixed overhead cost and volume variances. Select the required formulas, compute the fixed overhead cost and volun favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity: FOH = fixed overhead; SC = standard co Formula FOH cost variance FOH volume variance B Requirement 2. Explain why the variances are favorable or unfavorable. The variable overhead cost variance is Formula The variable overhead efficiency variance is The fixed overhead cost variance is == = Variance = Variance CITO because the actual cost per direct labor hour was because management used because the total fixed overhead cost was Data table Static budget variable overhead Static budget fixed overhead Static budget direct labor hours Static budget number of units Standard direct labor hours than the standard cost per direct labor hour. Print 4 $2,300 $3,450 1,150 hours. 575 units 2 hours per u Done direct labor hours than standard and variable overhead is applied (incurred) based on direct labor. than the amount budgeted for total fixed overhead.
Best, Inc. uses a standard cost system and provides the following information. (Click the icon to view the information.) Best allocates manufacturing overhead to production based on standard direct labor hours. Best reported the following actual results for 2024: actual number of units produced, 1,000; actual variable overhead, $3,800; actual fixed overhead, $3,500; actual direct labor hours, 1,400. Read the requirements. Requirement 1. Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances. Begin with the variable overhead cost and efficiency variances. Select the required formulas, compute the variable overhead cost and favorable (F) or unfavorable (U). (Abbreviations used: AC actual cost; AQ = actual quantity: FOH = fixed overhead; SC standard co = = VOH cost variance VOH efficiency variance Now compute the fixed overhead cost and volume variances. Select the required formulas, compute the fixed overhead cost and volun favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity: FOH = fixed overhead; SC = standard co Formula FOH cost variance FOH volume variance B Requirement 2. Explain why the variances are favorable or unfavorable. The variable overhead cost variance is Formula The variable overhead efficiency variance is The fixed overhead cost variance is == = Variance = Variance CITO because the actual cost per direct labor hour was because management used because the total fixed overhead cost was Data table Static budget variable overhead Static budget fixed overhead Static budget direct labor hours Static budget number of units Standard direct labor hours than the standard cost per direct labor hour. Print 4 $2,300 $3,450 1,150 hours. 575 units 2 hours per u Done direct labor hours than standard and variable overhead is applied (incurred) based on direct labor. than the amount budgeted for total fixed overhead.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Topic Video
Question
Transcribed Image Text:个
Best, Inc. uses a standard cost system and provides the following information.
(Click the icon to view the information.)
Best allocates manufacturing overhead to production based on standard direct labor hours. Best reported the following actual results for 2024: actual number of units produced, 1,000; actual
variable overhead, $3,800; actual fixed overhead, $3,500; actual direct labor hours, 1,400.
Read the requirements.
Requirement 1. Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances.
Begin with the variable overhead cost and efficiency variances. Select the required formulas, compute the variable overhead cost and
favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard co
VOH cost variance
VOH efficiency variance
=
FOH cost variance
FOH volume variance =
Requirement 2. Explain why the variances are favorable or unfavorable.
The variable overhead cost variance is
Formula
Now compute the fixed overhead cost and volume variances. Select the required formulas, compute the fixed overhead cost and volun
favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard co
Formula
The variable overhead efficiency variance is
▼
The fixed overhead cost variance is
=
Variance
=
Variance
...
because the actual cost per direct labor hour was
because management used
because the total fixed overhead cost was
Data table
Static budget variable overhead
Static budget fixed overhead
Static budget direct labor hours
Static budget number of units
Standard direct labor hours
than the standard cost per direct labor hour.
Print
than the amount budgeted for total fixed overhead.
$2,300
$3,450
1,150 hours
575 units
2 hours per u
Done
direct labor hours than standard and variable overhead is applied (incurred) based on direct labor.
![Best, Inc. uses a standard cost system and provides the following information. (Click the icon to view the
information.) variable overhead, $3,800; actual fixed overhead, $3, 500; actual direct labor hours, 1,400.
Read the requirements. Data table Requirement 1. Compute the variable overhead cost and efficiency
variances and fixed overhead cost and volume variances. Begin with the variable overhead cost and
efficiency variances. Select the required formulas, compute the variable overhead cost and favorable (F) or
unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead;
SC = standardco \table [[,, Formula,Variance], [VOH cost variance, = , 1 = , ], [VOH efficiency variance, =,1 =, 0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9ea2bb55-70aa-4113-8bc3-facd2f0d4c21%2Fb5c3619a-9d5a-4e30-bdfc-3848a9c8407c%2Frvswh_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Best, Inc. uses a standard cost system and provides the following information. (Click the icon to view the
information.) variable overhead, $3,800; actual fixed overhead, $3, 500; actual direct labor hours, 1,400.
Read the requirements. Data table Requirement 1. Compute the variable overhead cost and efficiency
variances and fixed overhead cost and volume variances. Begin with the variable overhead cost and
efficiency variances. Select the required formulas, compute the variable overhead cost and favorable (F) or
unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead;
SC = standardco \table [[,, Formula,Variance], [VOH cost variance, = , 1 = , ], [VOH efficiency variance, =,1 =, 0
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