The manager of Jane's Fans needed information regarding the company's overhead. She felt that there was a problem and asked Jane's accountant to grave her a breakdown of the variable and fixed overhead variances. The company experienced the following last period: -The company produced 40,000 fans and incurred the following overhead costs: variable overhead, $98,000; fixed overhead, $76,000. -Overhead rates were based on direct labor hours. The budgeted DL hours were 50,000 hours and the budgeted overhead was: variable, $105,000; fixed, $70,000. The standard hours allowed for each unit produced is 1.2 hours. -The amount of actual direct labor hours were 47,000 hours. The variable overhead efficiency variance was: a. $2,100F b. $700 U c. $14,700U d. $2,100U e. $700 F.

The manager of Jane's Fans needed information regarding the company's overhead. She felt that there was a problem and asked Jane's accountant to grave her a breakdown of the variable and fixed overhead variances. The company experienced the following last period: -The company produced 40,000 fans and incurred the following overhead costs: variable overhead, $98,000; fixed overhead, $76,000. -Overhead rates were based on direct labor hours. The budgeted DL hours were 50,000 hours and the budgeted overhead was: variable, $105,000; fixed, $70,000. The standard hours allowed for each unit produced is 1.2 hours. -The amount of actual direct labor hours were 47,000 hours. The variable overhead efficiency variance was: a. $2,100F b. $700 U c. $14,700U d. $2,100U e. $700 F.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 15E: Flaherty, Inc., has just completed its first year of operations. The unit costs on a normal costing...

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