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 $11,925 variable factory overhead cost, $96,750 for fixed factory overhead cost and 2,250 direct labor hours (its practical capacity) to manufacture 4,500 pairs of boots In March. The factory used 3,400 direct labor hours In March to manufacture 4,100 pairs of boots and spent $16,500 on variable overhead during the month. The actual fixed overhead cost incurred for the month was $99,450. Required: 1. Compute the fixed overhead spending (budget) variance and the production volume variance for March and Indicate whether each variance is favorable (F) or unfavorable (U). 2. Compute the fixed overhead flexible-budget variance for March. Is this variance favorable (F) or unfavorable (U)? 3. Provide the appropriate journal entry to record the fixed overhead spending variance and the appropriate journal entry to record the production volume variance for March. Assume that the company uses a single account, Factory Overhead, to record overhead costs.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Topic Video
Question

1. Compute the fixed overhead spending (budget) variance and the production volume variance for March and indicate whether each variance is favorable (F) or unfavorable (U).

2.  Compute the fixed overhead flexible-budget variance for March. Is this variance favorable (F) or unfavorable (U)?

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 $11,925 variable factory overhead cost, $96,750 for fixed factory overhead cost and 2,250 direct
labor hours (its practical capacity) to manufacture 4,500 pairs of boots in March.
The factory used 3,400 direct labor hours in March to manufacture 4,100 pairs of boots and spent $16,500 on variable
overhead during the month. The actual fixed overhead cost incurred for the month was $99,450.
Required:
1. Compute the fixed overhead spending (budget) variance and the production volume variance for March and Indicate whether each
variance is favorable (F) or unfavorable (U).
2. Compute the fixed overhead flexible-budget variance for March. Is this variance favorable (F) or unfavorable (U)?
3. Provide the appropriate journal entry to record the fixed overhead spending variance and the appropriate journal entry to record the
production volume 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
Required 3
Compute the fixed overhead spending (budget) variance and the production volume variance for March and indicate whether
each variance is favorable (F) or unfavorable (U).
Spending variance
Unfavorable
Production volume variance
Unfavorable
< Required 1
Required 2 >
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 $11,925 variable factory overhead cost, $96,750 for fixed factory overhead cost and 2,250 direct labor hours (its practical capacity) to manufacture 4,500 pairs of boots in March. The factory used 3,400 direct labor hours in March to manufacture 4,100 pairs of boots and spent $16,500 on variable overhead during the month. The actual fixed overhead cost incurred for the month was $99,450. Required: 1. Compute the fixed overhead spending (budget) variance and the production volume variance for March and Indicate whether each variance is favorable (F) or unfavorable (U). 2. Compute the fixed overhead flexible-budget variance for March. Is this variance favorable (F) or unfavorable (U)? 3. Provide the appropriate journal entry to record the fixed overhead spending variance and the appropriate journal entry to record the production volume 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 Required 3 Compute the fixed overhead spending (budget) variance and the production volume variance for March and indicate whether each variance is favorable (F) or unfavorable (U). Spending variance Unfavorable Production volume variance Unfavorable < Required 1 Required 2 >
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Follow-up Questions
Read through expert solutions to related follow-up questions below.
Follow-up Question
2
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 $11,925 varlable factory overhead cost, $96,750 for fixed factory overhead cost and 2,250 direct
labor hours (Its practical capacity) to manufacture 4,500 pairs of boots in March.
The factory used 3,400 direct labor hours in March to manufacture 4,100 pairs of boots and spent $16,500 on variable
overhead during the month. The actual fixed overhead cost Incurred for the month was $99,450.
Required:
1. Compute the factory overhead flexible-budget varlance, 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 varlance and a second entry to record the variable
overhead efficiency varlance 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
* Answer is complete but not entirely correct.
Spending variance
2,700 Favorable
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).
!This shows what is correct or Incorrect for the work you have completed so far.
Efficiency variance
7.155 Unfavorable
Variable overhead flexible-budget variance
8,600 Unfavorable
Required i
e
Required 2 >
Transcribed Image Text:2 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 $11,925 varlable factory overhead cost, $96,750 for fixed factory overhead cost and 2,250 direct labor hours (Its practical capacity) to manufacture 4,500 pairs of boots in March. The factory used 3,400 direct labor hours in March to manufacture 4,100 pairs of boots and spent $16,500 on variable overhead during the month. The actual fixed overhead cost Incurred for the month was $99,450. Required: 1. Compute the factory overhead flexible-budget varlance, 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 varlance and a second entry to record the variable overhead efficiency varlance 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 * Answer is complete but not entirely correct. Spending variance 2,700 Favorable 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). !This shows what is correct or Incorrect for the work you have completed so far. Efficiency variance 7.155 Unfavorable Variable overhead flexible-budget variance 8,600 Unfavorable Required i e Required 2 >
Solution
Bartleby Expert
SEE SOLUTION
Knowledge Booster
Costing Systems
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.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education