The (partial) cost sheet for the single product manufactured at Briarcliff Corporation follows: Direct labor (2 hours @ $30) $ 60 Variable overhead (2 hours @ $9) Fixed overhead (2 hours @ $11) The master budget level of production is 45,000 direct labor-hours, which is also the production volume used to compute the fixed overhead application rate. Other information available for operations over the past accounting period include the following: Actual variable overhead incurred Actual fixed overhead incurred Direct labor efficiency variance Variable overhead price variance 18 22 $ 411,000 463,000 63,000 F 6,000 U Required: a. What was the variable overhead efficiency variance? b. What was the fixed overhead price variance? c. What was the fixed overhead production volume variance? a. Variable overhead efficiency variance b. Fixed overhead price variance c. Fixed overhead production volume variance Note: For all requirements, indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.
The (partial) cost sheet for the single product manufactured at Briarcliff Corporation follows: Direct labor (2 hours @ $30) $ 60 Variable overhead (2 hours @ $9) Fixed overhead (2 hours @ $11) The master budget level of production is 45,000 direct labor-hours, which is also the production volume used to compute the fixed overhead application rate. Other information available for operations over the past accounting period include the following: Actual variable overhead incurred Actual fixed overhead incurred Direct labor efficiency variance Variable overhead price variance 18 22 $ 411,000 463,000 63,000 F 6,000 U Required: a. What was the variable overhead efficiency variance? b. What was the fixed overhead price variance? c. What was the fixed overhead production volume variance? a. Variable overhead efficiency variance b. Fixed overhead price variance c. Fixed overhead production volume variance Note: For all requirements, indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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Transcribed Image Text:The (partial) cost sheet for the single product manufactured at Briarcliff Corporation follows:
Direct labor
(2 hours @ $30)
$ 60
Variable overhead
(2 hours @ $9)
Fixed overhead
(2 hours @ $11)
The master budget level of production is 45,000 direct labor-hours, which is also the production volume used to compute
the fixed overhead application rate. Other information available for operations over the past accounting period include
the following:
Actual variable overhead incurred
Actual fixed overhead incurred
Direct labor efficiency variance
Variable overhead price variance
18
22
$ 411,000
463,000
63,000 F
6,000 U
Required:
a. What was the variable overhead efficiency variance?
b. What was the fixed overhead price variance?
c. What was the fixed overhead production volume variance?
a. Variable overhead efficiency variance
b. Fixed overhead price variance
c. Fixed overhead production volume variance
Note: For all requirements, indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If
there is no effect, do not select either option.
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