Longman Company manufactures shirts. During June, Longman made 1,900 shirts but

Question

Longman Company manufactures shirts. During June, Longman made 1,900 shirts but had budgeted production at 2,150 shirts. Longman gathered the following additional data:

Variable overhead cost standard

$0.80 per DLHr

Direct labor efficiency standard

4.50 DLHr per shirt

Actual amount of direct labor hours

8,620 DLHr

Actual cost of variable overhead

$10,344

Fixed overhead cost standard

$0.10 per DLHr

Budgeted fixed overhead

$968

Actual cost of fixed overhead

$1,033

Calculate the variable overhead cost variance.

Select the formula, then enter the amounts and compute the cost variance for variable overhead (VOH) and identify whether the variance is favorable (F) or unfavorable (U).

(

-

)

x

=

VOH Cost Variance

(

-

)

x

=

Calculate the variable overhead efficiency variance.

Select the formula, then enter the amounts and compute the efficiency variance for variable overhead and identify whether the variance is favorable (F) or unfavorable (U).

(

-

)

x

=

VOH Efficiency Variance

(

-

)

x

=

Calculate the total variable overhead variance

The total variable overhead variance is? Is it favorable or unfavorable?

.

Calculate the fixed overhead cost variance

Select the formula, then enter the amounts and compute the cost variance for fixed overhead (FOH) and identify whether the variance is favorable (F) or unfavorable(U).

-

=

Fixed Overhead Cost Variance

-

=

Calculate the fixed overhead volume variance

First, select the formula, then enter the amounts and compute the fixed overhead allocated to production. (Abbreviations used: SQ = standard quantity, AO = actualoutput.)

x

=

Overhead allocated to production

x

=

Now, select the formula, then enter the amounts and compute the fixed overhead volume variance and identify whether the variance is favorable (F) or unfavorable(U).

-

=

Fixed Overhead Volume Variance

-

=

Calculate the total fixed overhead variance.

The total fixed overhead variance is BLANK, is it favorable or unfavorable?

Variable overhead cost standard

$0.80 per DLHr

Direct labor efficiency standard

4.50 DLHr per shirt

Actual amount of direct labor hours

8,620 DLHr

Actual cost of variable overhead

$10,344

Fixed overhead cost standard

$0.10 per DLHr

Budgeted fixed overhead

$968

Actual cost of fixed overhead

$1,033

Explanation / Answer

1 Variable overhead cost variance (AR - SR) x AH = VOH Cost Variance ($1.20 - $0.80) x 8620 = $3448 U AR = $10344 / 8620 DLH = $1.20 2 Variable overhead efficiency variance (AH - SH) x SR = VOH Efficiency Variance (8620 - 8550) x $0.80 = $56 U SH = 1900 x 4.50 DLH = 8550 DLH 3 Total variable overhead variance = $3504 U 4 Fixed overhead cost variance Actual fixed overhead - Budgeted fixed overhead = Fixed Overhead Cost Variance $1033 - $968 = $65 U 5 Fixed overhead volume variance AO x SR = Overhead allocated to production 8620 x $0.10 = $862 Budgeted fixed overheads - Applied fixed overheads = Fixed Overhead Volume Variance $968 - $862 = $106 U 6 Total fixed overhead variance = $171 U

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.