Points: 0 of 10 Quality, Inc. uses a standard cost system and provides the following information. (Click the icon to view the information.) Quality allocates manufacturing overhead to production based on standard direct labor hours. Quality reported the following actual results for 2024: actual number of units produced, 1,000; actua variable overhead, $2,200; actual fixed overhead, $3,000, actual direct labor hours, 1,400. 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 fa unfavorable (U). (Abbreviations used: AC = actual cost, AQ = actual quantity, FOH = fixed overhead, SC standard cost; SQ = standard quantity, VOH = variable overhead.) VOH cost variance VOH efficiency variance Requirements Formula (AC - SC) × AQ (AQ-SQ) SC Variance 1. Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances. 2. Explain why the variances are favorable or unfavorable. - X Data table Static budget variable overhead Static budget fixed overhead Static budget direct labor hours Static budget number of units Standard direct labor hours $2,100 $2,800 1,400 hours 700 units 2 hours per unit X
Points: 0 of 10 Quality, Inc. uses a standard cost system and provides the following information. (Click the icon to view the information.) Quality allocates manufacturing overhead to production based on standard direct labor hours. Quality reported the following actual results for 2024: actual number of units produced, 1,000; actua variable overhead, $2,200; actual fixed overhead, $3,000, actual direct labor hours, 1,400. 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 fa unfavorable (U). (Abbreviations used: AC = actual cost, AQ = actual quantity, FOH = fixed overhead, SC standard cost; SQ = standard quantity, VOH = variable overhead.) VOH cost variance VOH efficiency variance Requirements Formula (AC - SC) × AQ (AQ-SQ) SC Variance 1. Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances. 2. Explain why the variances are favorable or unfavorable. - X Data table Static budget variable overhead Static budget fixed overhead Static budget direct labor hours Static budget number of units Standard direct labor hours $2,100 $2,800 1,400 hours 700 units 2 hours per unit X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Points: 0 of 10
Quality, Inc. uses a standard cost system and provides the following information.
(Click the icon to view the information.)
Quality allocates manufacturing overhead to production based on standard direct labor hours. Quality reported the following actual results for 2024: actual number of units produced, 1,000; actua
variable overhead, $2,200; actual fixed overhead, $3,000, actual direct labor hours, 1,400.
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 fa
unfavorable (U). (Abbreviations used: AC = actual cost, AQ = actual quantity, FOH = fixed overhead, SC standard cost; SQ = standard quantity, VOH = variable overhead.)
VOH cost variance
VOH efficiency variance
Requirements
Formula
(AC - SC) × AQ
(AQ-SQ) SC
Variance
1. Compute the variable overhead cost and efficiency variances and fixed
overhead cost and volume variances.
2. Explain why the variances are favorable or unfavorable.
- X
Data table
Static budget variable overhead
Static budget fixed overhead
Static budget direct labor hours
Static budget number of units
Standard direct labor hours
$2,100
$2,800
1,400 hours
700 units
2 hours per unit
X
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