The following data are the actual results for Marvelous Marshmallow Company for October.
Actual output | 9,000 cases |
Actual variable overhead | $405,000 |
Actual fixed overhead | $122,000 |
Actual machine time | 40,500 machine hours |
Standard cost and budget information for Marvelous Marshmallow Company follows:
Standard variable-overhead rate | $9.00 per machine hour |
Standard quantity of machine hours | 4 hours per case of marshmallows |
Budgeted fixed overhead | $120,000 per month |
Budgeted output | 10,000 cases per month |
Required:
1. Use any of the methods explained in the chapter to compute the following variances. Indicate whether each variance is favorable or unfavorable, where appropriate.
a. Variable-overhead spending variance.
b. Variable-overhead efficiency variance.
c. Fixed-overhead budget variance.
d. Fixed-overhead volume variance.
2. Build a spreadsheet: Construct an Excel spreadsheet to solve the preceding requirement. Show how the solution will change if the following information changes: actual output was 9,100 cases, and actual variable overhead was $395,000.
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