Overhead Variances, Two- And Three-Variance Analyses Oerstman, Inc., uses a standard costing system and develops its overhead rates from the current annual budget. The budget is based on an expected annual output of 123,000 units requiring 492,000 direct labor hours. (Practical capacity is 512,000 hours.) Annual budgeted overhead costs total $772,440, of which $555,960 is fixed overhead. A total of 119,300 units using 490,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $241,100, and actual fixed overhead costs were $556,200. Required:

Overhead Variances, Two- And Three-Variance Analyses Oerstman, Inc., uses a standard costing system and develops its overhead rates from the current annual budget. The budget is based on an expected annual output of 123,000 units requiring 492,000 direct labor hours. (Practical capacity is 512,000 hours.) Annual budgeted overhead costs total $772,440, of which $555,960 is fixed overhead. A total of 119,300 units using 490,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $241,100, and actual fixed overhead costs were $556,200. Required:

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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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Calculate VariancesThe following summary data relate to the operations of Randolph Company for July, during which 4,500 finished units were produced: Standard Units Costs Total Actual Costs Direct material Standard (0.6 lb. @ $13.00/lb.) $7.80 Actual (3,000 lb. @ $13.30/lb.) $39,900 Direct labor Standard (0.8 hr. @ $16.80/hr.) $13.44 Actual (3,800 hrs. @ $16.40/hr.) 62,320 Variable overhead Standard (0.8 hr. @ $11.50/hr.) $9.20 Actual - 46,100 Total $30.44 $148,320 Determine the following variances: Do not use negative signs with any of your answers. Next to each variance answer, select either "F" for Favorable or "U" for Unfavorable. Materials Variances Actual cost: Answer Split cost: Answer Standard cost: Answer Materials price Answer Answer Materials efficiency Answer Answer Labor Variances Actual cost: Answer Split cost:…
Overhead Variances, Two- And Three-Variance Analyses Oerstman, Inc., uses a standard costing system and develops its overhead rates from the current annual budget. The budget is based on an expected annual output of 121,500 units requiring 486,000 direct labor hours. (Practical capacity is 506,000 hours.) Annual budgeted overhead costs total $748,440, of which $544,320 is fixed overhead. A total of 119,200 units using 484,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $240,100, and actual fixed overhead costs were $555,300. Required: 1. Compute overhead variances using a two-variance analysis. Budget Variance $ Unfavorable Volume Variance $ Unfavorable 2. Compute overhead variances using a three-variance analysis. Spending Variance $ Unfavorable Efficiency Variance $ Unfavorable Volume Variance $ Unfavorable
Overhead Variances, Two- And Three-Variance Analyses Oerstman, Inc., uses a standard costing system and develops its overhead rates from the current annual budget. The budget is based on an expected annual output of 120,000 units requiring 480,000 direct labor hours. (Practical capacity is 500,000 hours.) Annual budgeted overhead costs total $748,800, of which $532,800 is fixed overhead. A total of 119,500 units using 478,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $241,900, and actual fixed overhead costs were $555,000. Required: 1. Compute overhead variances using a two-variance analysis. Budget Variance Volume Variance 2. Compute overhead variances using a three-variance analysis. Spending Variance Efficiency Variance Volume Variance
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Yourtube Company uses a standard cost system and prepared the following budget at normal capacity for the month of January. Direct labor hours Variable factory overhead Fixed factory overhead Total factory overhead per DLH 24,000 $48,000 $108,000 $6.50 Actual data for January were as follows: 22,000 Total factory overhead $147,000 Direct labor hours worked Standard DLH allowed for the capacity attained 21,000 Using the two-way analysis of overhead variances, what is the budget (controllable) variance for January? A. $3,000. B. $13,500 unfavorable. C. $9,000 favorable. D. $10,500 unfavorable.
Overhead costs are applied using direct labour hours. The following were budgeted for the year: Planned production (units) 50,000 Direct labour hours 200,000 Variable overhead 1,000,000 Fixed overhead 600,000 The following were the actual results: Actual production (units) 48,000 Direct labour hours 195,000 Variable overhead 950,000 Fixed overhead 610,000 Calculate the variable overhead efficiency variance. Select one: a. $15,000 U b. $25,000 U c. $25,000 F d. $15,000 F
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Overhead Variances, Two- And Three-Variance Analyses Oerstman, Inc., uses a standard costing system and develops its overhead rates from the current annual budget. The budget is based on an expected annual output of 122,000 units requiring 488,000 direct labor hours. (Practical capacity is 508,000 hours.) Annual budgeted overhead costs total $741,760, of which $541,680 is fixed overhead. A total of 119,100 units using 486,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $241,700, and actual fixed overhead costs were $556,050. Required: 1. Compute overhead variances using a two-variance analysis. Budget Variance Volume Variance 2. Compute overhead variances using a three-variance analysis. Spending Variance Efficiency Variance Volume Variance 00 00