Horngren's Accounting: The Managerial Chapters (12th Edition) (loose Leaf Version)

12th Edition

ISBN: 9780134486826

Author: MILLER-NOBLES, Tracie L.; Mattison, Brenda L.; Matsumura, Ella Mae

Publisher: PEARSON

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Textbook Question

Chapter 23, Problem E23.21E

Calculating overhead variances
Learning Objective 4

1, VOH Cost Var. $1,600 U

Mills, Inc, is a competitor of Murry, Inc, from Exercise E23-18 Mills also uses a standard cost system and provides the following information.

Static budget variable overhead	$1,200
Static budget fixed overhead	$ 1,600
Static budget direct labor hours	800 hours
Static budget number of units	400 units
Standard direct labor hours	2 hours per unit

Mills allocates manufacturing overhead to production based on standard direct labor hours. Mills reported the following actual results for 2018: actual number of units produced, 1,000; actual variable overhead, $4,000; actual fixed overhead, $3,100; actual direct labor hours, 1,600

Requirements
1. Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances.

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 E23.20E

Chapter 23, Problem E23.22E

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Chapter 23 Solutions

Horngren's Accounting: The Managerial Chapters (12th Edition) (loose Leaf Version)

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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