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Requirements 1. Compute the overhead variances for the year: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance. 2. Explain why the variances are favorable or unfavorable. Data table Static budget variable overhead Static budget fixed overhead Static budget direct labor hours Static budget number of units Standard direct labor hours $2,300 $23,000 575 hours 23,000 units 0.025 hours per fender

Requirements 1. Compute the overhead variances for the year: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance. 2. Explain why the variances are favorable or unfavorable. Data table Static budget variable overhead Static budget fixed overhead Static budget direct labor hours Static budget number of units Standard direct labor hours $2,300 $23,000 575 hours 23,000 units 0.025 hours per fender

FINANCIAL ACCOUNTING
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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Requirements 1. Compute the overhead variances for the year: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance. 2. Explain why the variances are favorable or unfavorable. Data table Static budget variable overhead Static budget fixed overhead Static budget direct labor hours Static budget number of units Standard direct labor hours $2,300 $23,000 575 hours 23,000 units 0.025 hours per fender
Transcribed Image Text:Requirements 1. Compute the overhead variances for the year: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance. 2. Explain why the variances are favorable or unfavorable. Data table Static budget variable overhead Static budget fixed overhead Static budget direct labor hours Static budget number of units Standard direct labor hours $2,300 $23,000 575 hours 23,000 units 0.025 hours per fender
Bargain Fender uses a standard cost system and provide the following information (Click the icon to view the information) Bargain Fender allocates manufacturing overhead to production based on standard direct labor hours Bargain Fender reported the following actual results for 2024 actual number of fonders produced, 20,000, actual variable overhead, $4,730, actual fixed overhood, $32.000, actual direct labor hours, 450 Read the requirements Requirement 1. Compute the overhead variances for the year: variable overhead cost variance, variable overhead officiency variance, faxed overhead cost vanance, and fixed overhead volume variance Begin with the variable overhead cost and efficiency variances. Select the required formulas, compute the vartable overhead cost and efficiency variances, and identify whether each variance is favorable (F) of unfavorable (U) (You may need to simply the formula based on the data provided Abbreviations used AC actual cost; AD actual quantity, FOH fixed overhead, SC standard cost, SQ- standard quantity, VOH-variable overhead) VOH cost variance VOH efficiency variance Formula Variance
Transcribed Image Text:Bargain Fender uses a standard cost system and provide the following information (Click the icon to view the information) Bargain Fender allocates manufacturing overhead to production based on standard direct labor hours Bargain Fender reported the following actual results for 2024 actual number of fonders produced, 20,000, actual variable overhead, $4,730, actual fixed overhood, $32.000, actual direct labor hours, 450 Read the requirements Requirement 1. Compute the overhead variances for the year: variable overhead cost variance, variable overhead officiency variance, faxed overhead cost vanance, and fixed overhead volume variance Begin with the variable overhead cost and efficiency variances. Select the required formulas, compute the vartable overhead cost and efficiency variances, and identify whether each variance is favorable (F) of unfavorable (U) (You may need to simply the formula based on the data provided Abbreviations used AC actual cost; AD actual quantity, FOH fixed overhead, SC standard cost, SQ- standard quantity, VOH-variable overhead) VOH cost variance VOH efficiency variance Formula Variance
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