Chapter 24, Problem 5R

Close the PRIMEVAR4 file and open PRIMEVAR3. Click the Chart sheet tab. On the screen is a graphical representation of the variances computed in requirement 3. Review the chart and answer the following questions:

1. a. Which variances does each bar represent?

   A __________

   B __________

   C __________

   D __________

2. b. Which of the variances shown would be of most concern to management for immediate attention? (Consider groups of variances and materiality also.) Explain.

When the assignment is complete, close the file without saving it again.

Worksheet. McGrade Industries also has the following information regarding overhead for October: actual overhead $375,000, standard variable overhead of $3 per direct labor hour, and standard fixed overhead of $5 per direct labor hour (based on 47,000 hours budgeted). Modify the PRIMEVAR3 worksheet to compute all appropriate overhead variances. Preview the printout to make sure that the worksheet will print neatly on one page, and then print the worksheet. Save the completed file as PRIMEVART.

Hint: Insert several new rows in the Data Section and in the Answer Section.

Chart. Using the PRIMEVAR3 file, prepare a 3-D stacked bar chart to compare total standard cost per unit with actual cost per unit. Complete the Chart Tickler Data Table and use it as a basis for preparing the chart. You do not need to use cell references when completing the table. Enter all appropriate titles, legends, and formats. Enter your name somewhere on the chart. Save the file again as PRIMEVAR3. Print the chart.