1. The following information was taken from the annual manufacturing overhead co
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Question
1. The following information was taken from the annual manufacturing overhead cost budget of Coen Company.
Variable manufacturing overhead costs $69,300
Fixed manufacturing overhead costs $41,580
Normal production level in labor hours 23,100
Normal production level in units 5,775
Standard labor hours per unit 4
During the year, 5,600 units were produced, 18,340 hours were worked, and the actual manufacturing overhead was $113,400. Actual fixed manufacturing overhead costs equaled budgeted fixed manufacturing overhead costs. Overhead is applied on the basis of direct labor hours. Coen's total overhead variance is
c. $5,880 U.
2. The following information was taken from the annual manufacturing overhead cost budget of Coen Company.
Variable manufacturing overhead costs $69,300
Fixed manufacturing overhead costs $41,580
Normal production level in labor hours 23,100
Normal production level in units 5,775
Standard labor hours per unit 4
During the year, 5,600 units were produced, 18,340 hours were worked, and the actual manufacturing overhead was $113,400. Actual fixed manufacturing overhead costs equaled budgeted fixed manufacturing overhead costs. Overhead is applied on the basis of direct labor hours. Coen's controllable overhead variance is
b. $4,620 U.
3. The following information was taken from the annual manufacturing overhead cost budget of Coen Company.
Variable manufacturing overhead costs $69,300
Fixed manufacturing overhead costs $41,580
Normal production level in labor hours 23,100
Normal production level in units 5,775
Standard labor hours per unit 4
During the year, 5,600 units were produced, 18,340 hours were worked, and the actual manufacturing overhead was $113,400. Actual fixed manufacturing overhead costs equaled budgeted fixed manufacturing overhead costs. Overhead is applied on the basis of direct labor hours. Coen's volume overhead variance is
a. $1,260 U.
4. Sonic Corporation%u2019s variance report for the purchasing department reports 500 units of material A purchased and 1,200 units of material B purchased. It also reports standard prices of $2 for Material A and $3 for Material B. Actual prices reported are $2.10 for Material A and $2.80 for Material B. Sonic should report a total price variance of
c. $20 U.
Explanation / Answer
Hi,
Please find the answers as follows:
Part A:
Total overhead variance = Total Overhead Cost Absorbed - Total Overhead Cost Incurred
Total overhead variance = (69300 + 41580)/5775*5600 - 113400 = 5880 (U)
Part B:
Controllable Variance = (69300/5775*5600 + 41580) - 113400 = 4620 (U)
Part C:
Volume Variance = Fixed Overhead Cost Absorbed - Budgeted Fixed Overhead Cost
Volume Variance =41580/5775*5600 - 41580 = 1260 (U)
Part D:
Material Price Variance = Actual Quantity*(Actual Rate - Standard Rate)
Material A = 500*(2.10 - 2) = 50 (U)
Material B = 1200*(2.8 - 3) = 240 (F)
Material Price Variance = 240 - 50 = 190 (F) (Please check this answer again, the answer mentioned by you is wrong.
Thanks.
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