Question

HOW DO I CALCULATE?

Sedona Company set the following standard costs for one unit of its product for this year. Direct material (30 Ibs. $2.20 per Ib.) Direct labor (20 hrs. $4.20 per hr.) Variable overhead (20 hrs. $2.20 per hr.) Fixed overhead (20 hrs. $1.10 per hr.) $ 66.00 84.00 44.00 22.00 $216.00 Total standard cost The $3.30 ($2.20 +$1.10) total overhead rate per direct labor hour is based on an expected operating level equal to 60% of the factory's capacity of 68,000 units per month. The following monthly flexible budget information is also available. Operating Levels (% of capacity) Flexible Budget Budgeted output (units) Budgeted labor (standard hours) Budgeted overhead (dollars) Variable overhead Fixed overhead 608 658 55 40,800 816,000 37,400 44,200 748,000 884,000 $1,944,800 897,600 $1,645,600 897,600 $1,795,200 897,600 $2,692,800 $2,842,400 Total overhead $2,543,200 During the current month, the company operated at 55% of capacity, employees worked 728,000 hours, and the following actual overhead costs were incurred. Variable overhead costs $1,625,000 924,300 Fixed overhead costs Total overhead costs $2,549,300 AH Actual Hours SH- Standard Hours AVR= Actual Variable Rate SVR= Standard Variable Rate 1. Compute the variable overhead spending and efficiency variances. 2. Compute the fixed overhead spending and volume variances and classify each as favorable or unfavorable. 3. Compute the controllable variance. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the variable overhead spending and efficiency variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Round "Rate per unit" to 2 decimal places.) Standard Cost (VOH applied) Actual Variable OH Cost: Flexible Budget 0 0

Answer 1

Date Poor Compute variable overhead spending & efficency variances - Vaciable overneal Cost variance Variable oH Spenting Variane Variable on Effocency varionce / (A) Variable of Spensing Variance Standard Rate - Actual Rate (Perhou) / x Actual How (Per hour) Standard & pate Actuels Hours - I Actual x Rane Actual Houre/ ($ 2.201 X 728000) - $16,25,000 Hrs 21 $ 16,01,600 – $16,25,000 ] $ 23,400 (Adverse) B) Variable oh efficency Variance - Standard Howes X Standard Rate Actual X standad Holy Rate / ISH - Attry IX Standard Rate

Date Page 1 748000 Hes X $2.20 - 728000 Hss X $2.20 $ 1645.6co - $ 1601,600] $44000 (Favamable] (C) vacuble overhead Clest variance Stan Laed cast - Actual cast ] cop f Standards & Standaad - Actual & Actuell House - Rate how pate $ 16,45,600 - $ 16,25,000 $ 20,600] (Favoveable [volt sparing & voh efficency] $23:40 CA) + $44000 () = $ 20,600 ( 1

Date roge 55% Cabacity fixed ovelhead cost ravance Fixed oH I volume vanne fixes oH Expensitive variano (Spending) (A fixed oH Spenting variance BFOH - AFOH of - (Busegeted Fixed oH Actual fisted oH | $897600 - $924,300 7 - $26,700 Adveese) (B fixed evernent volume variance [ Standard fixedon - Busested fixed on ] . Standaard & Standard] - Bubsted fiscloft / strous Rate / ( & 1(748000 H x $1.10) - $897,60 - [ $ 822,800 – $8.97,600] 74800 (Adverse)

Date Page - Fixes of cast variance [ Standard cost - Actual cost | Fon Fon ($822800 - $924200 ] - 8 101500 (Adverse) (fixed oH volume & Fixed of Expenditure - $26700 (A) +$74800 (A) $ 101,500 A

Date Pape Conteellable Variance (Revised 60% Cu varijable Cast vawance - Revised Standald - Actual Achat Standard Rate How fuel Сноши 14816000 x $2.20- $16.26.000 Houn $ 1798.000 - 816,25000 $170,200 / (favourable) 6. VOH Spending variance = [SR-AR] x Actual Home > (62.20 8 728000) - a $1625000] -181601600 - $16, 25,000 ] = 23,400 (Roverse) 6 - von Effieco variance Revised & Standeld - Istrs Rate Actual A Standad tere Rate = 1 816000 - $2.20 - 728000 2.20 pes = $$12.95,200 - $16.01,6W ? $ 193, 600 (Favourable) Treck : 234000) + $193 600 F = $1,70, 200 favouenta

- al fixed of Spending variance (Busseted I FOH Actual 7 Ford $897,600 - $924,360] $26700 (Adverse) 5 ficfoH Nolyme variance Revised Standard - I Butseted FOM Гон 816000 x $1.00 - ters $897600 [ $89760 – $8.97.600] Nis Coll Eixed GH - Revised Standad ЕОН Actual FOH Cast - $8,97,600 - $9 24,300] - 2 $26700 (Adreuse) Check = ($26700 (A) + Nid) - $2670 (A)

Date Page Conteellable Variance Geiginal a variable & fot ) - $20600 + $ 101,500 (A) $89,900 (A) Controllable) Revised (vanliable for a > $170,200 FE) + $26,700 6). $143,500 (F) / ($86,900(A) - $143,580 LE] Difference - = $ 62600 F