Required information [The following information applies to the questions displayed below.] The Platter Valley factory of Bybee Industries manufactures field boots. The cost of each boot includes direct materials, direct labor, and manufacturing (factory) overhead. The firm traces all direct costs to products, and it assigns overhead cost to products based on direct labor hours. The company budgeted $15,000 variable factory overhead cost, $90,000 for fixed factory overhead cost and 2,500 direct labor hours (its practical capacity) to manufacture 5,000 pairs of boots in March. The factory used 2,700 direct labor hours in March to manufacture 4,800 pairs of boots and spent $15,600 on variable overhead during the month. The actual fixed overhead cost incurred for the month was $92,000. Required: 1. Compute the factory overhead flexible-budget variance, the factory overhead spending variance, and the efficiency variance for variable factory overhead for March and state whether each variance is favorable (F) or unfavorable (U). 2. Provide the appropriate journal entry to record the variable overhead spending variance and a second entry to record the variable overhead efficiency variance for March. Assume that the company uses a single account, Factory Overhead, to record overhead costs. Complete this question by entering your answers in the tabs below.
Required information [The following information applies to the questions displayed below.] The Platter Valley factory of Bybee Industries manufactures field boots. The cost of each boot includes direct materials, direct labor, and manufacturing (factory) overhead. The firm traces all direct costs to products, and it assigns overhead cost to products based on direct labor hours. The company budgeted $15,000 variable factory overhead cost, $90,000 for fixed factory overhead cost and 2,500 direct labor hours (its practical capacity) to manufacture 5,000 pairs of boots in March. The factory used 2,700 direct labor hours in March to manufacture 4,800 pairs of boots and spent $15,600 on variable overhead during the month. The actual fixed overhead cost incurred for the month was $92,000. Required: 1. Compute the factory overhead flexible-budget variance, the factory overhead spending variance, and the efficiency variance for variable factory overhead for March and state whether each variance is favorable (F) or unfavorable (U). 2. Provide the appropriate journal entry to record the variable overhead spending variance and a second entry to record the variable overhead efficiency variance for March. Assume that the company uses a single account, Factory Overhead, to record overhead costs. Complete this question by entering your answers in the tabs below.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Topic Video
Question
SA
![Required information
[The following information applies to the questions displayed below.]
The Platter Valley factory of Bybee Industries manufactures field boots. The cost of each boot includes direct materials,
direct labor, and manufacturing (factory) overhead. The firm traces all direct costs to products, and it assigns overhead cost
to products based on direct labor hours.
The company budgeted $15,000 variable factory overhead cost, $90,000 for fixed factory overhead cost and 2,500 direct
labor hours (its practical capacity) to manufacture 5,000 pairs of boots in March.
The factory used 2,700 direct labor hours in March to manufacture 4,800 pairs of boots and spent $15,600 on variable
overhead during the month. The actual fixed overhead cost incurred for the month was $92,000.
Required:
1. Compute the factory overhead flexible-budget variance, the factory overhead spending variance, and the efficiency variance for
variable factory overhead for March and state whether each variance is favorable (F) or unfavorable (U).
2. Provide the appropriate journal entry to record the variable overhead spending variance and a second entry to record the variable
overhead efficiency variance for March. Assume that the company uses a single account, Factory Overhead, to record overhead costs.
Complete this question by entering your answers in the tabs below.
$
Required 1 Required 2
Compute the factory overhead flexible-budget variance, the factory overhead spending variance, and the efficiency variance
for variable factory overhead for March and state whether each variance is favorable (F) or unfavorable (U).
Spending variance
600 Favorable
$
Efficiency variance
1,200 Unfavorable
Variable overhead flexible-budget variance](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F289d7ed8-9d63-4fcc-b825-f4057b595b28%2F31144234-bee5-44af-b052-6ccfa6fd4914%2Fy0n50nc_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
The Platter Valley factory of Bybee Industries manufactures field boots. The cost of each boot includes direct materials,
direct labor, and manufacturing (factory) overhead. The firm traces all direct costs to products, and it assigns overhead cost
to products based on direct labor hours.
The company budgeted $15,000 variable factory overhead cost, $90,000 for fixed factory overhead cost and 2,500 direct
labor hours (its practical capacity) to manufacture 5,000 pairs of boots in March.
The factory used 2,700 direct labor hours in March to manufacture 4,800 pairs of boots and spent $15,600 on variable
overhead during the month. The actual fixed overhead cost incurred for the month was $92,000.
Required:
1. Compute the factory overhead flexible-budget variance, the factory overhead spending variance, and the efficiency variance for
variable factory overhead for March and state whether each variance is favorable (F) or unfavorable (U).
2. Provide the appropriate journal entry to record the variable overhead spending variance and a second entry to record the variable
overhead efficiency variance for March. Assume that the company uses a single account, Factory Overhead, to record overhead costs.
Complete this question by entering your answers in the tabs below.
$
Required 1 Required 2
Compute the factory overhead flexible-budget variance, the factory overhead spending variance, and the efficiency variance
for variable factory overhead for March and state whether each variance is favorable (F) or unfavorable (U).
Spending variance
600 Favorable
$
Efficiency variance
1,200 Unfavorable
Variable overhead flexible-budget variance
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 5 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education