XYZ automobiles, Inc. makes accessories primarily for cars.For 2017, budgeted variable overhead is ($90,000) for 12,000 direct
Question:
XYZ automobiles, Inc. makes accessories primarily for cars.For 2017, budgeted variable overhead is \($90,000\) for 12,000 direct labor-hours. Budgeted total overhead is \($110,000\) at 8,000 direct labor-hours. The standard costs allocated to the production of these accessories included a total overhead rate of 80 percent of standard direct labor costs.
In May 2017, XYZ automobiles incurred total overhead of \($160,000\) and direct labor costs of \($255,000.\) The direct labor efficiency variance was \($9,000\) unfavorable. The direct labor flexible-budget variance was \($6,000\) favorable. The standard labor price was \($18\) per hour. The production-volume variance was \($50,050\) favorable.
1. Compute the direct labor price variance.
2. Compute the denominator level and the spending and efficiency variances for total overhead.
3. Describe how individual variable overhead items are controlled from day to day. Also, describe how individual fixed overhead items are controlled.
Step by Step Answer:
Horngrens Cost Accounting A Managerial Emphasis
ISBN: 9781292211541
16th Global Edition
Authors: Srikant Datar, Madhav Rajan