Question

Homework: Ch 23 Probl Save Score: 0 of 8 pts 1 of 1 (0 complete) HW Score: 0%, 0 of 8 pts E23-20 (book/static) Question Help Mason Fender uses a standard cost system and provide the following information: (Click the icon to view the information.) Mason Fender allocates manufacturing overhead to production based on standard direct labor hours. Mason Fender reported the following actual results for 2018: actual number of fenders produced, 20,000; actual variable overhead, $5,350; actual fixed overhead. $26,000, actual direct labor hours, 460. Read the requirements. Requirement 1. Compute the overhead variances for the year: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance. Begin with the variable overhead cost and efficiency variances. Select the required formulas, compute the variable overhead cost and efficiency variances, and identify whether each variance is favorable (F) or unfavorable (U). (You may need to simply the formula based on the data provided. Abbreviations used: AC = actual cost; AQ = actual quantity, FOH = fixed overhead: SC = standard cost; SQ = standard quantity, VOH = variable overhead.) Formula Variance VOH cost variance VOH efficiency variance = L Choose from any list or enter any number in the input fields and then click Check Answer 5 5 remaining parts Clear All Check Answer

Answer 1

Solution:

Variable Overhead Cost Variance
Actual Cost					Standard cost for actual quantity					Standard Cost
AH *	AR =				AH *	SR =				SH *	SR =
460	$11.63	$5,350.00			460	$4.00	$1,840.00			500	$4.00	$2,000.00
			$3,510.00	U				$160.00	F
			Variable overhead rate variance					Variable overhead efficiency variance
Variable overhead spending variance					$3,510.00	U
Variable overhead efficiency variance					$160.00	F
Variable overhead cost variance					$3,350.00	U

Fixed Overhead Cost Variance

Actual Fixed OH Cost

Budgeted Fixed Overhead

Standard Cost (FOH Applies)

SH*

BR

$26,000.00

$23,000.00

500

$40.00

$20,000.00

$3,000.00

U

$3,000.00

U

Fixed overhead Budget Variance

Fixed overhead volume variance

Fixed overhead Budget Variance

$3,000.00

U

Fixed overhead volume variance

$3,000.00

U

Total Fixed overhead variance

$6,000.00

U