Question

The following data are the actual results for Marvelous Marshmallow Company for August.
Actual output............................................................. 13,500 cases
Actual variable overhead........................................... $607,500
Actual fixed overhead............................................... $183,000
Actual machine time.................................................. 60,750 machine hours
Standard cost and budget information for Marvelous Marshmallow Company follows:
Standard variable-overhead rate.......................$9.00 per machine hour
Standard quantity of machine hours................4 hours per case of marshmallows
Budgeted fixed overhead................................$180,000 per month
Budgeted output.............................................. 15,000 cases per month

Required:
1. Use any of the methods explained in the chapter to compute the following variances. Indicate whether each variance is favorable or unfavorable, where appropriate.
a. Variable-overhead spending variance.
b. Variable-overhead efficiency variance.
c. Fixed-overhead budget variance.
d. Fixed-overhead volume variance.
2. Construct an Excel spreadsheet to solve the preceding requirement. Show how the solution will change if the following information changes: actual output was 13,350 cases, and actual variable overhead was $609,000.



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  • CreatedApril 22, 2014
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