Static budget variable overhead $8,000 Static budget fixed overhead $3,200 Static budget direct labor hours 1,600 hours Static budget number of units 4,000 units Jackson allocates manufacturing overhead to production based on standard direct labor hours. Last month, Jackson reported the following actual results: actual variable overhead, $10,700; actual fixed overhead, $2,810; actual production of 7,400 units at 0.20 direct labor hours per unit. The standard direct labor time is 0.4 direct labor hours per unit (1,600 static direct labor hours / 4,000 static units). Compute the overhead variances for the month: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance.
Static budget variable overhead $8,000 Static budget fixed overhead $3,200 Static budget direct labor hours 1,600 hours Static budget number of units 4,000 units Jackson allocates manufacturing overhead to production based on standard direct labor hours. Last month, Jackson reported the following actual results: actual variable overhead, $10,700; actual fixed overhead, $2,810; actual production of 7,400 units at 0.20 direct labor hours per unit. The standard direct labor time is 0.4 direct labor hours per unit (1,600 static direct labor hours / 4,000 static units). Compute the overhead variances for the month: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
|
Static budget variable
|
$8,000
|
|---|---|
|
Static budget fixed overhead
|
$3,200
|
|
Static budget direct labor hours
|
1,600 hours
|
|
Static budget number of units
|
4,000 units
|
Jackson
allocates manufacturing overhead to production based on standard direct labor hours. Last month,
Jackson
reported the following actual results: actual variable overhead,
$10,700;
actual fixed overhead,
$2,810;
actual production of
7,400
units at
0.20
direct labor hours per unit. The standard direct labor time is
0.4
direct labor hours per unit
(1,600
static direct labor hours /
4,000
static units).|
Compute the overhead variances for the month: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance.
|
|
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