Bullseye Company manufactures dartboards. Its standard cost
information follows:
Standard Quantity | Standard Price (Rate) | Standard Unit Cost | ||||||
Direct materials (cork board) | 0.70 | sq. ft. | $ | 1.20 | per sq. ft. | $ | 0.84 | |
Direct labor | 1.00 | hrs. | $ | 12.00 | per hr. | 12.00 | ||
Variable manufacturing overhead (based on direct labor hours) | 1.00 | hrs. | $ | 0.60 | per hr. | 0.60 | ||
Fixed manufacturing overhead ($20,750/83,000) | 0.25 | |||||||
Bullseye has the following actual results for the month of
September:
Number of units produced and sold | 78,000 | |
Number of square feet of corkboard used | 58,600 | |
Cost of corkboard used | $ | 60,200 |
Number of labor hours worked | 82,000 | |
Direct labor cost | $ | 122,000 |
Variable overhead cost | $ | 125,760 |
Fixed overhead cost | $ | 33,000 |
Required:
1. Calculate the fixed overhead spending variance for
Bullseye. (Indicate the effect of each variance by
selecting "F" for favorable, "U" for unfavorable.)
2. Calculate the fixed overhead volume variance
for Bullseye. (Indicate the effect of each variance by
selecting "F" for favorable, "U" for unfavorable.)
3. Calculate the total over- or underapplied fixed
manufacturing overhead for Bullseye. (Indicate the effect
of each variance by selecting "F" for favorable/Overapplied and "U"
for unfavorable/underapplied.)
1. Fixed overhead spending variance = Actual fixed overhead - Budgeted fixed overhead
= $33,000 - $20750
= $12,250 Unfavorable
2. Fixed overhead volume variance = Budgeted fixed overhead - Standard fixed oh applied on actual production
= $20750 - (79,000 * 0.25)
= $20750 - $19750
= $1,000 Unfavorable
3. Total fixed overhead variance = Fixed overhead spending variance + Fixed overhead volume variance
= $12,250 Unfavorable + $1,000 Unfavorable
= $13,250 Unfavorable
Bullseye Company manufactures dartboards. Its standard cost information follows: Standard Quantity Standard Price (Rate) Standard Unit...
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