Question

Canvas Company manufactures paint. The company charges the following standard unit costs to production on the basis of static budget volume of 35,000 cans of paint per month:
Direct materials........................................................................................... $2.60
Direct labour............................................................................................... 2.30
Manufacturing overhead............................................................................. 1.60
Standard unit cost....................................................................................... $6.50
Canvas allocates overhead based on standard machine hours and uses the following monthly flexible budget for overhead:
Canvas actually produced 40,000 cans of paint, using 3,180 machine hours. Actual variable overhead was $16,400, and fixed overhead was $33,000. Compute the total overhead variance, the overhead flexible budget variance, and the production volume variance.


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  • CreatedApril 30, 2015
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