FINANCIAL ACCOUNTING
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ISBN: 9781259964947
Author: Libby
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Cholla Company’s standard fixed
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Calculate Cholla’s fixed overhead spending variance.
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- The following standard costs were used for one of its products: Standard Cost per Unit Fixed overhead Total 9 hours @ $13 per hour $ 117 Overhead is applied to products on the basis of standard direct labor hours for actual production. The following information is available regarding the company's operations for the period: Actual units produced Total actual direct labor hours Actual fixed manufacturing overhead incurred Budgeted fixed manufacturing overhead for the period Budgeted units for the period Required: Calculate the fixed overhead variances. Use your answer to answer the following questions. 1,200 units 8,500 hours $110,000 $122,850 1,050 unitsarrow_forwardRobinwood Fixtures manufactures two products, K4 and X7. The company prepares its master budget on the basis of standard costs. The following data are for September: Standards Direct materials Direct labor Variable overhead (per direct labor-hour) Fixed overhead (per month) FLACO Expected activity (direct labor-hours) Actual results Direct material (purchased and used) Direct labor Variable overhead Fixed overhead Units produced (actual) Direct materials Direct labor Variable overhead Fixed overhead Price Variance K4 Efficiency Variance 0.75 pounds at $8.60 per pound 1.25 hours at $26.60 per hour $ 21.80 $ 417,120 17,380 10,600 pounds at $8.00 per pound 14,830 hours at $26.90 per hour $ 343,060 $ 389,740 12,260 units Required: a. Prepare a variance analysis for each variable cost for each product. b. Prepare a fixed overhead variance analysis for each product. Note: For all requirements, Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for…arrow_forwardA. Show the solution for each. Compute in details the Variable Manufacturing Overhead Variances - Spending and Efficiency. B. Show the solution for each. Compute in details the Fixed Manufacturing Overhead Variances - Budget and Volume.arrow_forward
- SouthHaven Corporation applies overhead based on direct labor hours. According to standard cost card, the variable overhead standard is 11.5 hours at $20.5 per hour. During July, SouthHaven produced 4,600 units using 52,380 labor hours and spent $1,091,700 for variable overhead. What is the variable overhead efficiency variance? Multiple Choice $17,910 unfavorable $979,490 favorable $17,910 favorable $10,660 favorablearrow_forward.arrow_forwardThe records of Heritage Home Supplies show the following for July: Standard direct labor-hours allowed per unit of output 4 Standard variable overhead rate per standard direct labor-hour $ 44 Good units produced 3,800 Actual direct labor-hours worked 14,675 Actual total direct labor cost $ 537,200 Direct labor efficiency variance $ 19,530 F Actual variable overhead $ 645,700 Required: Compute the direct labor and variable overhead price and efficiency variances. Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Direct labor: Price variance Efficiency variance Variable overhead: Price variance Efficiency variance need helparrow_forward
- Krump Corporation's cost formula for its manufacturing overhead is $30,600 per month plus $64 per machine-hour. For the month of March, the company planned for activity of 7,900 machine-hours, but the actual level of activity was 7,880 machine- hours. The actual manufacturing overhead for the month was $558,610. The spending variance for manufacturing overhead in March would be closest to: O $22,410 U O $22,410 F O $23,690 F O $23,690 Uarrow_forwardThe Fellowes Company has developed standards for direct labor. During June, 75 units were scheduled and 100 were produced. Data related to direct labor are: Standard hours allowed 4 hours per unit Standard wages allowed $ 5.00 per hour Actual direct labor 410 hours (total cost $2,009) What is the direct labor rate variance for June?arrow_forwardIn October, Pine Company reports 20,600 actual direct labor hours, and it incurs $257,000 of manufacturing overhead costs. Standard hours allowed for the work done is 25,700 hours. The predetermined overhead rate is $10.25 per direct labor hour. In addition, the flexible manufacturing overhead budget shows that budgeted costs are $8.19 variable per direct labor hour and $51,500 fixed.Compute the overhead volume variance. Normal capacity was 25,000 direct labor hours.arrow_forward
- In October, Pine Company reports 21,000 actual direct labor hours, and it incurs $118,000 of manufacturing overhead costs. Standard hours allowed for the work done is 20,600 hours. The predetermined overhead rate is $6.00 per direct labor hour. In addition, the flexible manufacturing overhead budget shows that budgeted costs are $4 variable per direct labor hour and $50,000 fixed. Compute the overhead controllable variance. Overhead Controllable Variance $ 5600 Favorable 23arrow_forward3 Cholla Company's standard fixed overhead rate is based on budgeted fixed manufacturing overhead of $11,100 and budgeted production of 30,000 units. Actual results for the month of October reveal that Cholla produced 29,000 units and spent $11,400 on fixed manufacturing overhead costs. Required: Calculate Cholla's fixed overhead spending variance. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Fixed Overhead Spending Variancearrow_forwardVinubhaiarrow_forward
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