Bullseye Company manufactures dartboards. Its standard cost information follows: Standard Quantity Standard Price (Rate) Standard Unit Cost
Question:
Bullseye Company manufactures dartboards. Its standard cost information follows:
Standard Quantity | Standard Price (Rate) | Standard Unit Cost | ||||||
Direct materials (cork board) | 0.70 | sq. ft. | $ | 1.20 | per sq. ft. | $ | 0.84 | |
Direct labor | 1.00 | hrs. | $ | 12.00 | per hr. | 12.00 | ||
Variable manufacturing overhead (based on direct labor hours) | 1.00 | hrs. | $ | 0.60 | per hr. | 0.60 | ||
Fixed manufacturing overhead ($20,750/83,000) | 0.25 | |||||||
Bullseye has the following actual results for the month of September:
Number of units produced and sold | 78,000 | |
Number of square feet of corkboard used | 58,600 | |
Cost of corkboard used | $ | 60,200 |
Number of labor hours worked | 82,000 | |
Direct labor cost | $ | 122,000 |
Variable overhead cost | $ | 125,760 |
Fixed overhead cost | $ | 33,000 |
Required:
1. Calculate the fixed overhead spending variance for Bullseye. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.)
2. Calculate the fixed overhead volume variance for Bullseye. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.)
3. Calculate the total over- or underapplied fixed manufacturing overhead for Bullseye. (Indicate the effect of each variance by selecting "F" for favorable/Overapplied and "U" for unfavorable/underapplied.)
Managerial Accounting
ISBN: 978-0078025518
2nd edition
Authors: Stacey Whitecotton, Robert Libby, Fred Phillips