Calculating Variable Manufacturing Overhead, Fixed Manufacturing Overhead Variances
Catch a Wave Company manufactures surfboards. Its standard cost information follows.
| Standard Quantity | Standard Price (Rate) | Standard Unit Cost |
Direct costs |
|
|
|
Fiberglass | 15 sq. ft. | $ 5 per sq. ft. | $ 75.00 |
Direct labor | 10 hr. | 15 per hr. | 150.00 |
Variable manufacturing overhead |
| 6 per direct labor hour | 60.00 |
Fixed manufacturing overhead ($20,000/250 units) |
|
| 80.00 |
Catch a Wave has the following actual results for the month of June:
Number of units produced and sold | 260 |
Number of square feet of fiberglass used | 4,100 |
Cost of fiberglass used | $22,550 |
Number of labor hours worked | 2,550 |
Direct labor cost | $39,525 |
Variable overhead cost | $14,790 |
Fixed overhead cost | $20,500 |
Required:
Calculate the following variances for Catch a Wave.
1.Variable overhead rate variance.
2. Variable overhead efficiency variance.
3. Total over- or underapplied variable overhead.
4. Fixed overhead spending (budget) variance.
5. Fixed overhead volume variance.
6. Total over- or underapplied fixed overhead.
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