Crystal Glassware Company has the following standards and flexible-budget data.

Question

Crystal Glassware Company has the following standards and flexible-budget data. 20 per direct-labor hour 2.5 hours per unit of output Standard variable-overhead rate Standard quantity of direct labor Budgeted fixed overhead Budgeted output $410,000 30,500 units Actual results for April are as follows: 18,900 units Actual output Actual variable overhead Actual fixed overhead Actual direct labor $1,061,550 s 346,000 50,550 hours Required: Use the following diagrams below (similar to Exhibit 11-6 and Exhibit 11-8 to compute (1) the variable-overhead spending and efficiency variances, and (2) the fixed-overhead budget and volume variances.

Explanation / Answer

variable overhead spending and efficiency variances [1] [2] actual variable overhead projected variable overhead actual hours(AQ) actual rate(AVR) actual hours(AQ) standard rate(SVR) actual rate(AVR)= 1061550/50550=21 50550 * 21 50550 * 20 = 1061550 = 1011000 Variable overhead spending variance = [2]-[1] = -50550 Unfavourable [3] output = 18900 units [4]output = 18900 flexible budget : variable overhead variable overhead applied to work in process standard allowed hours (sq)= 2.5*18900 * standard rate (AQ) * standard rate 47250 20 50550 20 = 945000 1011000 variable overhead efficiency variance = [4]-[3] = -66000 Unfavourable Fixed overhead budget and Volume varainces [1] [2] [3] actual fixed overhead Budgeted fixed overhead fixed overhead applied to work in process 346000 410000 standard allowed hours * standard fixed overhead rate = 410000/(2.5*30500) = fixed overhead budget variance= [2]- [1] 47250 5.38 64000 favourable = 254205 fixed overhead volume variance = [3]-[1]= -91795 unfavourable

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