Identifying favorable and unfavorable variances. Tred-America, Inc., manufactures tires for large auto companies. It uses standard costing and allocates variable and fixed manufacturing overhead based on machine-hours. For each independent scenario given, indicate whether each of the manufacturing variances will be favorable or unfavorable or, in case of insufficient information, indicate "CBD" (cannot be determined). Fixed Variable Variable Fixed Overhead Overhead Overhead Overhead Production- Spending Efficiency Variance Spending Variance Volume Scenario Variance Variance Production output is 8% more than budgeted, and actual fixed manufacturing overhead costs are 7% less than budgeted Production output is 11% more than budgeted; actual machine-hours are 5% less than budgeted Production output is 15% less than budgeted Actual machine-hours are 18% greater than flexible-budget machine-hours Relative to the flexible budget, actual machine-hours are 10% greater, and actual variable manufacturing overhead costs are 15% less
Identifying favorable and unfavorable variances. Tred-America, Inc., manufactures tires for large auto companies. It uses standard costing and allocates variable and fixed manufacturing overhead based on machine-hours. For each independent scenario given, indicate whether each of the manufacturing variances will be favorable or unfavorable or, in case of insufficient information, indicate "CBD" (cannot be determined). Fixed Variable Variable Fixed Overhead Overhead Overhead Overhead Production- Spending Efficiency Variance Spending Variance Volume Scenario Variance Variance Production output is 8% more than budgeted, and actual fixed manufacturing overhead costs are 7% less than budgeted Production output is 11% more than budgeted; actual machine-hours are 5% less than budgeted Production output is 15% less than budgeted Actual machine-hours are 18% greater than flexible-budget machine-hours Relative to the flexible budget, actual machine-hours are 10% greater, and actual variable manufacturing overhead costs are 15% less
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter9: Evaluating Variances From Standard Costs
Section: Chapter Questions
Problem 3PB: Direct materials, direct labor, and factory overhead cost variance analysis Road Gripper Tire Co....
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
Recommended textbooks for you
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College