Overhead costs to fabricate Fake News (FNs) include polling research and an annual retainer to a consortium of Big-Wigs. The polling research is budgeted at $75 per DLH (and each FN should take 15 DLH) while the retainer is budgeted at $100,000 per year. You had expected to fabricate 200 FNs during 2021. Actual results for 2021 were: 210 FNs fabricated $230,000 spent on polling research $105,000 spent on the Big-Wig retainer Calculate variable and fixed overhead spending variances, efficiency, and production volume variances. How much will COGS change, and in what direction, when these variances are closed out?
Overhead costs to fabricate Fake News (FNs) include polling research and an annual retainer to a consortium of Big-Wigs. The polling research is budgeted at $75 per DLH (and each FN should take 15 DLH) while the retainer is budgeted at $100,000 per year. You had expected to fabricate 200 FNs during 2021. Actual results for 2021 were: 210 FNs fabricated $230,000 spent on polling research $105,000 spent on the Big-Wig retainer Calculate variable and fixed overhead spending variances, efficiency, and production volume variances. How much will COGS change, and in what direction, when these variances are closed out?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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