Esquire Clothing is a manufacturer of designer sults. For June 2020, each sut is budgeted to take 3 labor-hours. The budgeted number of subs to be manufactured in June 2020 i 1.120. Esquire Clothing allocates fixed manufacturing overhead to each suit using budgeted direct manufacturing labor-hours per suit. Data pertaining to fixed manufacturing overhead costs for June 2020 are budgeted, $57,120, and actual $63,900. In June 2020 there were 1,140 sults started and completed. There were no beginning or ending inventories of suits Requirements 1. Compute the spending variance for fixed manufacturing overhead Comment on the results 2. Compute the production-volume variance for June 2020. What inferences can Esquire Clothing draw from this variance? Requirement 1. Compute the spending variance for fixed manufacturing overhead. Comment on the results. Begin by computing the following amounts for the fixed manufacturing overhead Actual Costs Incurred Same Budgeted Lump Sum Regardless of Output Level Flexible Budget Same Budgeted Lump Sum Regardless of Output Level Allocated Overhead

Esquire Clothing is a manufacturer of designer sults. For June 2020, each sut is budgeted to take 3 labor-hours. The budgeted number of subs to be manufactured in June 2020 i 1.120. Esquire Clothing allocates fixed manufacturing overhead to each suit using budgeted direct manufacturing labor-hours per suit. Data pertaining to fixed manufacturing overhead costs for June 2020 are budgeted, $57,120, and actual $63,900. In June 2020 there were 1,140 sults started and completed. There were no beginning or ending inventories of suits Requirements 1. Compute the spending variance for fixed manufacturing overhead Comment on the results 2. Compute the production-volume variance for June 2020. What inferences can Esquire Clothing draw from this variance? Requirement 1. Compute the spending variance for fixed manufacturing overhead. Comment on the results. Begin by computing the following amounts for the fixed manufacturing overhead Actual Costs Incurred Same Budgeted Lump Sum Regardless of Output Level Flexible Budget Same Budgeted Lump Sum Regardless of Output Level Allocated Overhead

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Chapter1: Financial Statements And Business Decisions

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Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

Esquire Clothing is a manufacturer of designer suits For June 2020, each suit is budgeted to take 3 labor-hours. The budgeted number of suits to be manufactured in June 2020 is 1,120, Esquire
Clothing allocates fixed manufacturing overhead to each suit using budgeted direct manufacturing labor-hours per suit. Data pertaining to fixed manufacturing overhead costs for June 2020
are budgeted, $57,120, and actual, $63,900. In June 2020 there were 1,140 suits started and completed. There were no beginning or ending inventories of suits
Requirements
1. Compute the spending variance for fixed manufacturing overhead. Comment on the results.
2. Compute the production-volume variance for June 2020. What inferences can Esquire Clothing draw from this variance?
+
Requirement 1. Compute the spending variance for fixed manufacturing overhead. Comment on the results
Begin by computing the following amounts for the fixed manufacturing overhead
Actual Costs
Incurred
Same Budgeted
Lump Sum
Regardless of
Output Level
Flexible Budget:
Same Budgeted
Lump Sum
Regardless of
Output Level
Allocated
Overhead

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