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uperior

uperior

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Superior Fender uses a standard cost system and provide the following information
ria - X Requirements st a th 1. Compute the overhead variances for the year: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance. 2. Explain why the variances are favorable or unfavorable. Print Done ble overhead $5,425
Transcribed Image Text:ria - X Requirements st a th 1. Compute the overhead variances for the year: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance. 2. Explain why the variances are favorable or unfavorable. Print Done ble overhead $5,425
Superior Fender uses a standard cost system and provide the following information: E (Click the icon to view the information.) Superior Fender allocates manufacturing overhead to production based on standard direct labor hours. Superior Fender reported the following actual results for 2024: actual number of fenders produced, 20,000; actual variable overhead, $4,960; actual fixed overhead, $35,000; actual direct labor hours, 370. Read the requirements. Requirement 1. Compute the overhead variances for the year: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance. Begin with the variable overhead cost and efficiency variances. Select the required formulas, compute the variable overhead cost and efficiency variances, and identify whether each variance is favorable (F) or unfavorable (U). (You may need to simply the formula based on the data provided. Abbreviations used: ÁC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost, SQ = standard quantity; VOH = variable overhead.) Formula Variance VOH cost variance (AC - SC) x AQ VOH efficiency variance (AQ - SQ) x SC Data table Static budget variable overhead $5,425 Static budget fixed overhead $31,000 Static budget direct labor hours 775 hours Static budget number of units 31,000 units Standard direct labor hours 0.025 hours per fender elp - Clear all Check answer Print Done
Transcribed Image Text:Superior Fender uses a standard cost system and provide the following information: E (Click the icon to view the information.) Superior Fender allocates manufacturing overhead to production based on standard direct labor hours. Superior Fender reported the following actual results for 2024: actual number of fenders produced, 20,000; actual variable overhead, $4,960; actual fixed overhead, $35,000; actual direct labor hours, 370. Read the requirements. Requirement 1. Compute the overhead variances for the year: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance. Begin with the variable overhead cost and efficiency variances. Select the required formulas, compute the variable overhead cost and efficiency variances, and identify whether each variance is favorable (F) or unfavorable (U). (You may need to simply the formula based on the data provided. Abbreviations used: ÁC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost, SQ = standard quantity; VOH = variable overhead.) Formula Variance VOH cost variance (AC - SC) x AQ VOH efficiency variance (AQ - SQ) x SC Data table Static budget variable overhead $5,425 Static budget fixed overhead $31,000 Static budget direct labor hours 775 hours Static budget number of units 31,000 units Standard direct labor hours 0.025 hours per fender elp - Clear all Check answer Print Done
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