Shumaker Company manufacturs a line of high-top basket shoes. At the begining of

Question

Shumaker Company manufacturs a line of high-top basket shoes. At the begining of the year, the following plans for production and cost were revealed:
Pairs of shoes to be produced : 55000
Standard cost per unit:
Direct material: $15
Direct labor: $12
Variable overhead: $6
Fixed overhead: $3
During the year, a total of 50,000 units were produced and sold. The following actual costs were incurred:
Direct materials: $775,000
Direct labor: $590,000
Variable overhead: $310,000
Fixed overhead: $180,000
There were no begining or ending inventories of raw materials. In producing the 50,000 units, 63,000 hours were worked, 5 percent more hour than the standard allowed for the actual output. Overhead cost are applied to production using direct labor hours.
Determine the following:
a.Fixed overhead spending and volume variances.
b. Variable overhead spending and efficiency variances.
The result is Volume variance= $15000U; Efficiency variance =$15000U
Please do me a fovor in making it clear. Thanks

Explanation / Answer

50000

15.5

11.8

6.2

3.6

63000

Standards Actuals Shoes Production 55000

50000

Per unit Total Per unit Total Direct Materials 15 825000

15.5

775000 Direct Labor 12 660000

11.8

590000 Variable overhead 6 330000

6.2

310000 Fixed overhead 3 165000

3.6

180000 Hours 60000

63000

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