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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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
Transcribed Image Text:Great, Inc. uses a standard cost system and provides the following information.
(Click the icon to view the information.)
Great allocates manufacturing overhead to production based on standard direct labor hours. Great reported the following actual results for 2024: actual number of
units produced, 1,000; actual variable overhead, $5,000; actual fixed overhead, $3,000; actual direct labor hours, 1,700.
Read the requirements.
Requirement 1. Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances.
Begin with the variable overhead cost and efficiency variances. Select the required formulas, compute the variable overhead cost and efficiency variances, and identify
whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost;
SQ = standard quantity; VOH = variable overhead.)
VOH cost variance
VOH efficiency variance
=
1.
2.
=
Requirements
Formula
Data table
Compute the variable overhead cost and efficiency variances and fixed
overhead cost and volume variances.
Explain why the variances are favorable or unfavorable.
Static budget variable overhead
Static budget fixed overhead
Static budget direct labor hours
Static budget number of units
Standard direct labor hours
Print
$1,200
$1,600
Variance
800 hours
400 units
2 hours per unit
Done
X
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