tter Valley factory of Bybee Industries manufactures field boots. The cost of each boot includes abor, and manufacturing (factory) overhead. The firm traces all direct costs to products, and it at ucts based on direct labor hours.
tter Valley factory of Bybee Industries manufactures field boots. The cost of each boot includes abor, and manufacturing (factory) overhead. The firm traces all direct costs to products, and it at ucts based on direct labor hours.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Required information
[The following information applies to the questions displayed below.]
The Platter Valley factory of Bybee Industries manufactures field boots. The cost of each boot includes direct materials,
direct labor, and manufacturing (factory) overhead. The firm traces all direct costs to products, and it assigns overhead cost
to products based on direct labor hours.
The company budgeted $15,000 variable factory overhead cost, $90,000 for fixed factory overhead cost and 2,500 direct
labor hours (its practical capacity) to manufacture 5,000 pairs of boots in March.
The factory used 2,700 direct labor hours in March to manufacture 4,800 pairs of boots and spent $15,600 on variable
overhead during the month. The actual fixed overhead cost incurred for the month was $92,000.
Required:
1. Compute the factory overhead flexible-budget variance, the factory overhead spending variance, and the efficiency variance for
variable factory overhead for March and state whether each variance is favorable (F) or unfavorable (U).
2. Provide the appropriate journal entry to record the variable overhead spending variance and a second entry to record the variable
overhead efficiency variance for March. Assume that the company uses a single account, Factory Overhead, to record overhead costs.
$
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Compute the factory overhead flexible-budget variance, the factory overhead spending variance, and the efficiency variance
for variable factory overhead for March and state whether each variance is favorable (F) or unfavorable (U).
Spending variance
600 Favorable
$
Efficiency variance
1,200 Unfavorable
Variable overhead flexible-budget variance](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa3aee5f4-3513-4f47-9b3f-33eeb9b6ee1a%2F5a1344f9-944e-4bc1-a70a-d12fbaab2ed0%2Fqwvu68w_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
The Platter Valley factory of Bybee Industries manufactures field boots. The cost of each boot includes direct materials,
direct labor, and manufacturing (factory) overhead. The firm traces all direct costs to products, and it assigns overhead cost
to products based on direct labor hours.
The company budgeted $15,000 variable factory overhead cost, $90,000 for fixed factory overhead cost and 2,500 direct
labor hours (its practical capacity) to manufacture 5,000 pairs of boots in March.
The factory used 2,700 direct labor hours in March to manufacture 4,800 pairs of boots and spent $15,600 on variable
overhead during the month. The actual fixed overhead cost incurred for the month was $92,000.
Required:
1. Compute the factory overhead flexible-budget variance, the factory overhead spending variance, and the efficiency variance for
variable factory overhead for March and state whether each variance is favorable (F) or unfavorable (U).
2. Provide the appropriate journal entry to record the variable overhead spending variance and a second entry to record the variable
overhead efficiency variance for March. Assume that the company uses a single account, Factory Overhead, to record overhead costs.
$
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Compute the factory overhead flexible-budget variance, the factory overhead spending variance, and the efficiency variance
for variable factory overhead for March and state whether each variance is favorable (F) or unfavorable (U).
Spending variance
600 Favorable
$
Efficiency variance
1,200 Unfavorable
Variable overhead flexible-budget variance
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