Required:Calculate the overhead variance and explain why it is favorable or unfavorable #W #2ansSportsman, Inc. produces different sizes of basketballs. The following costs wereincurred during the year for PBA-sized basketball production.P81,250 (23% is indirect)87,500 (27% is indirect)70,000 (including indirect materialsand indirect labor)Problem 5MaterialsLaborActual Factory overheadSelling expensesGeneral and Administrative expenses3,25023,250Sportsman applies overhead to production at 100% of direct labor cost. There wereno work in process at the end of the year and there were no finished goods inventoryat the beginning. 5,000 units were produced, and 90% of the units produced weresold.

The formula for overhead variance: Overhead variance=Standard Factory Overhead-Actual Factory…

#W #2 Problem 5 Sportsman, Inc. produces different sizes of basketballs. The following costs were incurred during the year for PBA-sized basketball production. P81,250 (23% is indirect) 87,500 (27% is indirect) 70,000 (including indirect materials and indirect labor) Materials Labor Actual Factory overhead Selling expenses General and Administrative expenses 3,250 23,250 Sportsman applies overhead to production at 100% of direct labor cost. There were no work in process at the end of the year and there were no finished goods inventory at the beginning. 5,000 units were produced, and 90% of the units produced were sold.

#W #2 Problem 5 Sportsman, Inc. produces different sizes of basketballs. The following costs were incurred during the year for PBA-sized basketball production. P81,250 (23% is indirect) 87,500 (27% is indirect) 70,000 (including indirect materials and indirect labor) Materials Labor Actual Factory overhead Selling expenses General and Administrative expenses 3,250 23,250 Sportsman applies overhead to production at 100% of direct labor cost. There were no work in process at the end of the year and there were no finished goods inventory at the beginning. 5,000 units were produced, and 90% of the units produced were sold.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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