Question: Review the data from Great Fender given in Exercise E23

Review the data from Great Fender given in Exercise E23- 19. Consider the ­following additional information:
Static budget variable overhead........... $ 5,500
Static budget fixed overhead ........... $ 22,000
Static budget direct labor hours ........... 550 hours
Static budget number of units ........... 22,000 units
Great Fender allocates manufacturing overhead to production based on standard ­direct labor hours. Great Fender reported the following actual results for 2014: ­actual variable overhead, $ 4,950; actual fixed overhead, $ 23,000.

1. Compute the overhead variances for the year: variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance. 2. Explain why the variances are favorable or unfavorable.

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  • CreatedJanuary 16, 2015
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