Horngren's Accounting, The Financial Chapters (12th Edition)

12th Edition

ISBN: 9780134486789

Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura

Publisher: PEARSON

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Textbook Question

Chapter 23, Problem E23.20E

Computing overhead variances Learning Objective 4

1. FOH VoL Var. $3,000 U Mason Fender is a competitor of Matthews Fender from Exercise E23-19. Mason Fender also uses a standard cost system and provides the following information:

Static budget variable overhead	$ 2,300
Static budget fixed overhead	$23,000
Static budget direct labor hours	575 hours
Static budget number of units	23,000 units
Standard direct labor hours	0,025 hours per fender

Mason Fender allocates manufacturing overhead to production based on standard direct labor hours. Mason Fender reported the following actual results for 2018: actual number of fenders produced, 20,000: actual variable overhead, $5,350: actual fixed overhead, $26,000: actual direct labor hours, 460

Requirements
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,

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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Chapter 23, Problem E23.19E

Chapter 23, Problem E23.21E

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Chapter 23 Solutions

Horngren's Accounting, The Financial Chapters (12th Edition)

Ch. 23 - Prob. 1QC Ch. 23 - MajorNet Systems is a start-up company that makes...Ch. 23 - MajorNet Systems is a start-up company that makes...Ch. 23 - MajorNet Systems is a start-up company that makes...Ch. 23 - MajorNet Systems has budgeted three hours of...Ch. 23 - MajorNet Systems has budgeted three hours of...Ch. 23 - FrontGrade Systems allocates manufacturing...Ch. 23 - FrontGrade Systems allocates manufacturing...Ch. 23 - FrontGrade Systems allocates manufacturing...Ch. 23 - The person probably most responsible for the...

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