Using the information in P25-2A, compute the overhead controllable variance and the overhead volume variance. Data From

Question:

Using the information in P25-2A, compute the overhead controllable variance and the overhead volume variance.

Data From Problem 25-2A:

Ayala Corporation accumulates the following data relative to jobs started and finished during the month of June 2014.

                          

Overhead is applied on the basis of standard machine hours. Three hours of machine time are required for each direct labor hour. The jobs were sold for $400,000. Selling and administrative expenses were $40,000. Assume that the amount of raw materials purchased equaled the amount used.

Instructions
(a) Compute all of the variances for

(1) direct materials and
(2) direct labor.

(b) Compute the total overhead variance.
(c) Prepare an income statement for management. (Ignore income taxes.)

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Accounting Principles

ISBN: 9781118566671

11th Edition

Authors: Jerry Weygandt, Paul Kimmel, Donald Kieso

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