Rowe Corporation reported the following variances for the period just ended: Var
ID: 2516159 • Letter: R
Question
Rowe Corporation reported the following variances for the period just ended:
Variable-overhead spending variance: $ 67,000U
Variable-overhead efficiency variance: $ 45,000U
Fixed-overhead budget variance: $ 87,000U
Fixed-overhead volume variance: $ 47,000U
If Rowe desires to analyze variances that arose primarily from managers' expenditures in excess of anticipated amounts, the company should focus on variances that total:
$67,000U.
$87,000U.
$154,000U.
$246,000U.
None of these.
Robert Company, which applies overhead to production on the basis of machine hours, reported the following data for the period just ended:
Actual units produced: 12,000
Actual variable overhead incurred: $69,700
Actual machine hours worked:18,200
Standard variable overhead cost per machine hour: $4.50
If Robert estimates 1.40 hours to manufacture a completed unit, the company's variable-overhead spending variance is:
$6,300 favorable.
$6,300 unfavorable.
$12,200 favorable.
$12,200 unfavorable.
None of these.
Explanation / Answer
1)correct option is "D" -246000
Total unfavorable variance = 67000+45000+87000+47000=246000
2)variable overhead spending variance : AMH [AR-SR]
= 69700 - [18200 * 4.5]
69700 - 81900
- 12200 F
COrrect option is "c"
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