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Compute the labor and variable overhead price and efficiency variances.

Compute the labor and variable overhead price and efficiency variances.

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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Records at the Farnsworth Corporation contained the following data for the most recent period of activity: Actual total direct labor cost Actual direct labor-hours worked Standard direct labor-hours allowed for actual output (flexible budget) Direct labor price variance Actual variable overhead Standard variable overhead rate per standard direct labor-hour $ 468,100 15,100 14,200 Efficiency Variance Variable overhead: Price Variance Efficiency Variance $45,300 F $ 347,300 $22 Variable overhead is applied based on standard direct labor- hours allowed. Required: Compute the labor and variable overhead price and efficiency variances. Note: Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Direct Labor: Price Variance
Transcribed Image Text:Records at the Farnsworth Corporation contained the following data for the most recent period of activity: Actual total direct labor cost Actual direct labor-hours worked Standard direct labor-hours allowed for actual output (flexible budget) Direct labor price variance Actual variable overhead Standard variable overhead rate per standard direct labor-hour $ 468,100 15,100 14,200 Efficiency Variance Variable overhead: Price Variance Efficiency Variance $45,300 F $ 347,300 $22 Variable overhead is applied based on standard direct labor- hours allowed. Required: Compute the labor and variable overhead price and efficiency variances. Note: Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Direct Labor: Price Variance
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