Acme Company's production budget for August is 23,000 units and includes the following component unit costs: direct materials, $9.0; direct labor, $11.0; variable overhead, $5.8. Budgeted fixed overhead is $49,000. Actual production in August was 24,075 unit Actual unit component costs incurred during August include direct materials, $10.00; direct labor, $10.00; variable overhead, $6.80. Actual fixed overhead was $52,200. The standard variable overhead rate per unit consists of $5.8 per machine hour and each unit allowed a standard of 1 hour of machine time. During August, $163,710 of actual variable overhead cost was incurred for 27,285 machine hours. Required: Calculate the variable overhead spending variance and the variable overhead efficiency variance. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i. zero variance).) Variable overhead spending variance Variable overhead efficiency variance
Acme Company's production budget for August is 23,000 units and includes the following component unit costs: direct materials, $9.0; direct labor, $11.0; variable overhead, $5.8. Budgeted fixed overhead is $49,000. Actual production in August was 24,075 unit Actual unit component costs incurred during August include direct materials, $10.00; direct labor, $10.00; variable overhead, $6.80. Actual fixed overhead was $52,200. The standard variable overhead rate per unit consists of $5.8 per machine hour and each unit allowed a standard of 1 hour of machine time. During August, $163,710 of actual variable overhead cost was incurred for 27,285 machine hours. Required: Calculate the variable overhead spending variance and the variable overhead efficiency variance. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i. zero variance).) Variable overhead spending variance Variable overhead efficiency variance
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead
Section: Chapter Questions
Problem 14P: Fargo Co. manufactures products in batches of 100 units per batch. The company uses a standard cost...
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:Acme Company's production budget for August is 23,000 units and includes the following component unit costs: direct materials,
$9.0; direct labor, $11.0; variable overhead, $5.8. Budgeted fixed overhead is $49,000. Actual production in August was 24,075 units.
Actual unit component costs incurred during August include direct materials, $10.00; direct labor, $10.00; variable overhead, $6.80.
Actual fixed overhead was $52,200. The standard variable overhead rate per unit consists of $5.8 per machine hour and each unit is
allowed a standard of 1 hour of machine time. During August, $163,710 of actual variable overhead cost was incurred for 27,285
machine hours.
Required:
Calculate the variable overhead spending variance and the variable overhead efficiency variance. (Do not round intermediate
calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e.,
zero variance).)
Variable overhead spending variance
Variable overhead efficiency variance
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