EBK COST ACCOUNTING
EBK COST ACCOUNTING
15th Edition
ISBN: 9780133812763
Author: Rajan
Publisher: VST
Question
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Chapter 8, Problem 8.37P

1.

To determine

Spending Variance:

Spending variance is the deviation of actual expenses from the budgeted expenses.

Efficiency Variance:

Efficiency variance is the distinction between actual quantity of input and estimated quantity of input purchased for a particular price.

Production-Volume Variance:

Production volume variance determines the amount of overhead employed to the quantity produced. It is the distinction between the actual quantity manufactured and estimated quantity that should have been manufactured multiplied by budgeted overhead rate.

Price Variance:

Price variance is the distinction between the estimated or budgeted price of the input material and actual price of the input material multiplied by actual volume of input.

Budgeted fixed overhead rate:

Budgeted fixed overhead rate is the sum total of estimated overhead cost divided by the total volume of budgeted cost allocation base.

To compute: Static budget number of setups for 2014.

2.

To determine

To compute: Flexible budget number of setups for 2014.

3.

To determine

To compute: Actual number of setups in 2014.

4.

To determine

To compute: Budgeted fixed setup overhead allocation rate.

5.

To determine

Additional charge cover the budgeted direct variable cost and budgeted total cost.

6.

To determine

To compute: Price and efficiency variance for direct variable setup costs.

7.

To determine

To compute: Spending and production-volume variance for fixed setup overhead costs.

8.

To determine

Qualitative factors to be considered by RS Company before accepting or rejecting a special order.

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