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Young Clothing is a manufacturer of designer suits. The cost of each suit is the sum of three variable costs (direct materials costs, direct manufacturing labour costs, and manufacturing overhead costs) and one fixed- cost category (manufacturing overhead costs). Variable manufacturing overhead cost is allocated to each suit based on budgeted direct manufacturing labour-hours (DMLH) per suit. For June 2018, each suit is budgeted to take 4 labour-hours. Budgeted variable manufacturing overhead cost per labour-hour is $12.00. The budgeted number of suits to be manufactured in June 2018 is 1,040. Actual variable manufacturing overhead costs in June 2018 were $53,298 for 1,080 suits started and completed. There was no beginning or ending inventory of suits. Actual DMLH for June were 4,536. Required 1. Compute the flexible-budget variance, the rate variance, and the efficiency variance for variable manufacturing overhead 2. Comment on the results

Young Clothing is a manufacturer of designer suits. The cost of each suit is the sum of three variable costs (direct materials costs, direct manufacturing labour costs, and manufacturing overhead costs) and one fixed- cost category (manufacturing overhead costs). Variable manufacturing overhead cost is allocated to each suit based on budgeted direct manufacturing labour-hours (DMLH) per suit. For June 2018, each suit is budgeted to take 4 labour-hours. Budgeted variable manufacturing overhead cost per labour-hour is $12.00. The budgeted number of suits to be manufactured in June 2018 is 1,040. Actual variable manufacturing overhead costs in June 2018 were $53,298 for 1,080 suits started and completed. There was no beginning or ending inventory of suits. Actual DMLH for June were 4,536. Required 1. Compute the flexible-budget variance, the rate variance, and the efficiency variance for variable manufacturing overhead 2. Comment on the results

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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Young Clothing is a manufacturer of designer suits. The cost of each suit is the sum of three variable costs (direct materials costs, direct manufacturing labour costs, and manufacturing overhead costs) and one fixed- cost category (manufacturing overhead costs). Variable manufacturing overhead cost is allocated to each suit based on budgeted direct manufacturing labour-hours (DMLH) per suit. For June 2018, each suit is budgeted to take 4 labour-hours. Budgeted variable manufacturing overhead cost per labour-hour is $12.00. The budgeted number of suits to be manufactured in June 2018 is 1,040. Actual variable manufacturing overhead costs in June 2018 were $53,298 for 1,080 suits started and completed. There was no beginning or ending inventory of suits. Actual DMLH for June were 4,536. Required 1. Compute the flexible-budget variance, the rate variance, and the efficiency variance for variable manufacturing overhead 2. Comment on the results
Transcribed Image Text:Young Clothing is a manufacturer of designer suits. The cost of each suit is the sum of three variable costs (direct materials costs, direct manufacturing labour costs, and manufacturing overhead costs) and one fixed- cost category (manufacturing overhead costs). Variable manufacturing overhead cost is allocated to each suit based on budgeted direct manufacturing labour-hours (DMLH) per suit. For June 2018, each suit is budgeted to take 4 labour-hours. Budgeted variable manufacturing overhead cost per labour-hour is $12.00. The budgeted number of suits to be manufactured in June 2018 is 1,040. Actual variable manufacturing overhead costs in June 2018 were $53,298 for 1,080 suits started and completed. There was no beginning or ending inventory of suits. Actual DMLH for June were 4,536. Required 1. Compute the flexible-budget variance, the rate variance, and the efficiency variance for variable manufacturing overhead 2. Comment on the results
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