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In May 2017, Pampered Pets incurred total overhead of $133,000 and direct labor costs of $178,125. The direct labor efficiency variance was $7,500 unfavorable. The direct labor flexible-
- A. Compute the direct labor price variance.
- B. Compute the denominator level and the spending and efficiency variances for total overhead.
- C. Describe how individual variable overhead items are controlled from day to day. Also, describe how individual fixed overhead items are controlled.
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Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
- i Data Table 1. Quantity of lamps to be produced 2. Number of lamps to be produced per batch 3. Setup time per batch Variable cost $70 per setup-hour Fixed cost = $75,000 Print Knox 23,000 lamps 250 lamps/batch 4 hours/batch Done Ayer 15,000 lamps - 200 lamps/batch 5 hours/batch Xarrow_forwardEsquire Clothing allocates fixed manufacturing overhead to each suit using budgeted direct manufacturing labor-hours per suit. Data pertaining to fixed manufacturing overhead costs for June 2017 are budgeted, $62,400, and actual, $63,916. Q. Compute the spending variance for fixed manufacturing overhead. Comment on the results.arrow_forward. Best Around, Inc., is a manufacturer of vacuums and uses standard costing. Manufacturing overhead (both variable and fixed) is allocated to products on the basis of budgeted machine-hours. In 2017, budgeted fixed manufacturing overhead cost was $17,000,000. Budgeted variable manufacturing overhead was $10 per machine-hour. The denominator level was 1,000,000 machine-hours. Q. Prepare a graph for fixed manufacturing overhead. The graph should display how Best Around, Inc.’s fixed manufacturing overhead costs will be depicted for the purposes of (a) planning and control and (b) inventory costing.arrow_forward
- Deluxe, Inc. uses a standard cost system and provides the following information. Static budget variable overhead $2,100 Static budget fixed overhead $2,800 Static budget direct labor hours 1,400 hours Static budget number of units 700 units Standard direct labor hours 2 hours per unit Deluxe allocates manufacturing overhead to production based on standard direct labor hours. Deluxe reported the following actual results for 2018: actual number of units produced, 1,000; actual variable overhead, $5,000; actual fixed overhead, $3,500; actual direct labor hours, 1,900. 1. Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances. 2. Explain why the variances are favorable or unfavorable. 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…arrow_forward. Best Around, Inc., is a manufacturer of vacuums and uses standard costing. Manufacturing overhead (both variable and fixed) is allocated to products on the basis of budgeted machine-hours. In 2017, budgeted fixed manufacturing overhead cost was $17,000,000. Budgeted variable manufacturing overhead was $10 per machine-hour. The denominator level was 1,000,000 machine-hours. Q.Suppose that 1,125,000 machine-hours were allowed for actual output produced in 2017, but 1,200,000 actual machine-hours were used. Actual manufacturing overhead was $12,075,000, variable, and $17,100,000, fixed. Compute (a) the variable manufacturing overhead spending and efficiency variances and (b) the fixed manufacturing overhead spending and production-volume variancesarrow_forwardHorace Company manufactures a professional-grade vacuum cleaner and began operations in 2017. For 2017, Horace budgeted to produce and sell 25,000 units. The company had no price, spending, or efficiency variances and writes off production-volume variance to cost of goods sold. Actual data for 2017 are given in attatched picture: Q.Prepare a 2017 income statement for Horace Company using absorption costingarrow_forward
- Esquire Clothing is a manufacturer of d esigner suits. The cost of each suit is the sum of three variable costs (direct material costs, direct manufacturing labor costs, and manufacturing overhead costs) and one fixed-cost category (manufacturing overhead costs). Variable manufacturing overhead cost is allocated to each suit on the basis of budgeted direct manufacturing labor-hours per suit. For June 2017, each suit is budgeted to take 4 labor-hours. Budgeted variable manufacturing overhead cost per labor-hour is $12. The budgeted number of suits to be manufactured in June 2017 is 1,040. Actual variable manufacturing costs in June 2017 were $52,164 for 1,080 suits started and completed. There were no beginning or ending inventories of suits. Actual direct manufacturing labor-hours for June were 4,536. Q1. Compute the flexible-budget variance, the spending variance, and the efficiency variance for variable manufacturing overhead. Q2. Comment on the results.arrow_forwardAll−Star, Inc. uses a standard cost system and provides the following information. Static budget variable overhead $1,200 Static budget fixed overhead $1,600 Static budget direct labor hours 800 hours Static budget number of units 400 units Standard direct labor hours 2 hours per unit All−Star allocates manufacturing overhead to production based on standard direct labor hours. All−Star reported the following actual results for 2018: actual number of units produced, 1,000; actual variable overhead, $3,800; actual fixed overhead, $3,400; actual direct labor hours, 1,500. 1. Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances. 2. Explain why the variances are favorable or unfavorable. 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…arrow_forwardDirect-cost and overhead variances, income statement. The Greenspace Company started business on January 1, 2017. The company adopted a standard costing system for the production of ergonomic backpacks. Greenspace chose direct labor as the application base for overhead and decided to use the proration method to account for variances at year-end. In 2017, Greenspace expected to make and sell 160,000 backpacks; each was budgeted to use 2 yards of fabric and require 0.5 hours of direct labor work. The company expected to pay $2 per yard for fabric and compensate workers at an hourly wage of $12. Greenspace has no variable overhead costs, but budgeted $800,000 for fixed manufacturing overhead in 2017. In 2017, Greenspace actually made 180,000 backpacks and sold 144,000 of them for a total revenue of 2592000arrow_forward
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- Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning