Russo Corporation manufactured 16,000 air conditioners during November. The overhead cost-allocation base is $31.50 per machine-hour. The following variable overhead data pertain to November: Actual Budgeted Production 16,000 units 18,000 units Machine-hours 7,875 hours 9,000 hours Variable overhead cost per machine-hour: $31.00 $31.50 What is the variable overhead spending variance? A) $4,500 unfavorable B) $3,937.50 unfavorable C) $4,500 favorable D) $3,937.50 favorable What is the variable overhead efficiency variance? A) $3,937.50 favorable B) $3,937.50 unfavorable C) $4,500 favorable D) $4,500 unfavorable What is the total variable overhead flex budget variance A) $7,875 unfavorable B) $3,937.50 unfavorable C) $7,875 favorable D) $3,937.50 favorable
Russo Corporation manufactured 16,000 air conditioners during November. The overhead cost-allocation base is $31.50 per machine-hour. The following variable overhead data pertain to November: Actual Budgeted Production 16,000 units 18,000 units Machine-hours 7,875 hours 9,000 hours Variable overhead cost per machine-hour: $31.00 $31.50 What is the variable overhead spending variance? A) $4,500 unfavorable B) $3,937.50 unfavorable C) $4,500 favorable D) $3,937.50 favorable What is the variable overhead efficiency variance? A) $3,937.50 favorable B) $3,937.50 unfavorable C) $4,500 favorable D) $4,500 unfavorable What is the total variable overhead flex budget variance A) $7,875 unfavorable B) $3,937.50 unfavorable C) $7,875 favorable D) $3,937.50 favorable
Chapter1: Financial Statements And Business Decisions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Russo Corporation manufactured 16,000 air conditioners during November. The |
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Actual | Budgeted | |||||||||||||
Production | 16,000 units | 18,000 units | ||||||||||||
Machine-hours | 7,875 hours | 9,000 hours | ||||||||||||
Variable overhead cost per machine-hour: | $31.00 | $31.50 | ||||||||||||
What is the variable overhead spending variance? | ||||||||||||||
A) $4,500 unfavorable | ||||||||||||||
B) $3,937.50 unfavorable | ||||||||||||||
C) $4,500 favorable | ||||||||||||||
D) $3,937.50 favorable | ||||||||||||||
What is the variable overhead efficiency variance? | ||||||||||||||
A) $3,937.50 favorable | ||||||||||||||
B) $3,937.50 unfavorable | ||||||||||||||
C) $4,500 favorable | ||||||||||||||
D) $4,500 unfavorable | ||||||||||||||
What is the total variable overhead flex |
||||||||||||||
A) $7,875 unfavorable | ||||||||||||||
B) $3,937.50 unfavorable | ||||||||||||||
C) $7,875 favorable | ||||||||||||||
D) $3,937.50 favorable |
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