The (partial) cost sheet for the single product manufactured at Vienna Company follows. Direct labor (17 hours @ $25) $ 425 Variable overhead (17 hours @ $2) 34 Fixed overhead (17 hours @ $4) 68 The master budget level of production is 82,000 direct-labor hours, which is also the production volume used to compute the fixed overhead application rate. Other information available for operations over the past accounting period include the following. Actual variable overhead incurred $ 132,000 Actual fixed overhead incurred 343,200 Direct labor efficiency variance 162,000 U Variable overhead price variance 30,000 F Required: a. What was the variable overhead efficiency variance? b. What was the fixed overhead price variance? c. What was the fixed overhead production volume variance?
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
The (partial) cost sheet for the single product manufactured at Vienna Company follows.
| Direct labor | (17 hours @ $25) | $ | 425 | |
| Variable |
(17 hours @ $2) | 34 | ||
| Fixed overhead | (17 hours @ $4) | 68 | ||
The
| Actual variable overhead incurred | $ | 132,000 | |
| Actual fixed overhead incurred | 343,200 | ||
| Direct labor efficiency variance | 162,000 | U | |
| Variable overhead price variance | 30,000 | F | |
Required:
a. What was the variable overhead efficiency variance?
b. What was the fixed overhead price variance?
c. What was the fixed overhead production volume variance?
(For all requirements, indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)
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