Mills, Inc. uses a standard cost system and provides the following information. E (Click the icon to view the information.) Mills allocates manufacturing overhead to production based on standard direct labor hours. Mills reported the following actual results for 2018: actual number of units produced, 1,000; actual variable overhead, $4,000; actual fixed overhead, $3,100; actual direct labor hours, 1,600. 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 efficiency variances, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity: FOH = fixed overhead; SC = standard cost; SQ = standard quantity; VOH = variable overhead.) Requirements Formula Variance Data Table VOH cost variance VOH efficiency variance 1. Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances. Static budget variable overhead $1,200 2. Explain why the variances are favorable or unfavorable. Static budget fixed overhead $1,600 Static budget direct labor hours 800 hours Print Done Static budget number of units 400 units Standard direct labor hours 2 hours per unit
Mills, Inc. uses a standard cost system and provides the following information. E (Click the icon to view the information.) Mills allocates manufacturing overhead to production based on standard direct labor hours. Mills reported the following actual results for 2018: actual number of units produced, 1,000; actual variable overhead, $4,000; actual fixed overhead, $3,100; actual direct labor hours, 1,600. 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 efficiency variances, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity: FOH = fixed overhead; SC = standard cost; SQ = standard quantity; VOH = variable overhead.) Requirements Formula Variance Data Table VOH cost variance VOH efficiency variance 1. Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances. Static budget variable overhead $1,200 2. Explain why the variances are favorable or unfavorable. Static budget fixed overhead $1,600 Static budget direct labor hours 800 hours Print Done Static budget number of units 400 units Standard direct labor hours 2 hours per unit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Chapter 23, Question 3. Please answer in same format as question so it's easy to transfer
Transcribed Image Text:Mills, Inc. uses a standard cost system and provides the following information.
E (Click the icon to view the information.)
Mills allocates manufacturing overhead to production based on standard direct labor hours. Mills reported the following actual results for 2018: actual number of units produced, 1,000; actual variable overhead, $4,000; actual fixed overhead,
$3,100; actual direct labor hours, 1,600.
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 efficiency variances, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations
used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity; VOH = variable overhead.)
Requirements
Formula
Variance
Data Table
VOH cost variance
VOH efficiency variance
1. Compute the variable overhead cost and efficiency variances and fixed
overhead cost and volume variances.
Static budget variable overhead
$1,200
2. Explain why the variances are favorable or unfavorable.
Static budget fixed overhead
$1,600
Static budget direct labor hours
800 hours
Print
Done
Static budget number of units
400 units
Standard direct labor hours
2 hours per unit
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