The Tamarisk manufactures double-sided pens-a pen on one side, a highlighter on the other. As the accounting manager, Shade is responsible for presenting three different versions of the company's income statement to the rest of the management team at year- end. Team members are very familiar with absorption costing, as they have been evaluating gross margin amounts and percentages for years. They are less keen on how fixed-MOH impacts the income statement, so Shade gathers the following current information. The information includes three possible capacity levels for calculating the fixed-MOH rate. Shade also notes there are no price or efficiency variances this period. Any fixed-MOH volume variance is written off to COGS. Theoretical level Practical level Normal level Actual production Sales volume Budgeted fixed-MOH cost Budgeted DM cost Budgeted DL cost Budgeted variable-MOH cost Selling price (a) Theoretical Practical Normal Your answer is partially correct. 93,000 units Calculate the fixed-MOH volume variance for each possible capacity level this year; specify amount and sign. $ 55,800 units $ 45,000 units 59,800 units 50,000 units $ $279,000 $2.27 per unit $1.30 per unit $0.30 per unit $16.00 per unit Fixed-MOH Volume Variance Unfavorable Favorable. Favorable Sign Ĵ
The Tamarisk manufactures double-sided pens-a pen on one side, a highlighter on the other. As the accounting manager, Shade is responsible for presenting three different versions of the company's income statement to the rest of the management team at year- end. Team members are very familiar with absorption costing, as they have been evaluating gross margin amounts and percentages for years. They are less keen on how fixed-MOH impacts the income statement, so Shade gathers the following current information. The information includes three possible capacity levels for calculating the fixed-MOH rate. Shade also notes there are no price or efficiency variances this period. Any fixed-MOH volume variance is written off to COGS. Theoretical level Practical level Normal level Actual production Sales volume Budgeted fixed-MOH cost Budgeted DM cost Budgeted DL cost Budgeted variable-MOH cost Selling price (a) Theoretical Practical Normal Your answer is partially correct. 93,000 units Calculate the fixed-MOH volume variance for each possible capacity level this year; specify amount and sign. $ 55,800 units $ 45,000 units 59,800 units 50,000 units $ $279,000 $2.27 per unit $1.30 per unit $0.30 per unit $16.00 per unit Fixed-MOH Volume Variance Unfavorable Favorable. Favorable Sign Ĵ
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The Tamarisk manufactures double-sided pens-a pen on one side, a highlighter on the other. As the accounting manager, Shade is
responsible for presenting three different versions of the company's income statement to the rest of the management team at year-
end. Team members are very familiar with absorption costing, as they have been evaluating gross margin amounts and percentages for
years. They are less keen on how fixed-MOH impacts the income statement, so Shade gathers the following current information. The
information includes three possible capacity levels for calculating the fixed-MOH rate. Shade also notes there are no price or
efficiency variances this period. Any fixed-MOH volume variance is written off to COGS.
Theoretical level
Practical level
Normal level
Actual production
Sales volume
Budgeted fixed-MOH cost
Budgeted DM cost
Budgeted DL cost
Budgeted variable-MOH cost
Selling price
(a)
Theoretical
Practical
Normal
93,000 units
$
55,800 units
Your answer is partially correct.
$
45,000 units
Calculate the fixed-MOH volume variance for each possible capacity level this year; specify amount and sign.
$
59,800 units
50,000 units
$279,000
$2.27 per unit
$1.30
per unit
$0.30 per unit
$16.00 per unit
Fixed-MOH Volume Variance
Unfavorable
Favorable
Favorable
Sign
Used
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Step 1: Explanation for Fixed MOH Volume Variance and various activities level:
VIEWStep 2: Calculation of Fixed Manufacturing Overhead Volume Variance at Theoretical capacity:
VIEWStep 3: Calculation of Fixed Manufacturing Overhead Volume Variance at Practical capacity:
VIEWStep 4: Calculation of Fixed Manufacturing Overhead Volume Variance at Normal capacity:
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