• 8-21. VARIABLE MANUFACTURING OVERHEAD, VARIANCE ANALYSIS. Esquire Clothing is a manufacturer of designer suits. The cost of each suit is the sum of three variable costs (direct material costs, direct manufacturing labor costs, and manufacturing overhead costs) and one fixed-cost category (manufacturing overhead costs). Variable manufacturing overhead cost is allocated to each suit on the basis of budgeted direct manufacturing labor-hours per suit. For June 2020, each suit is budgeted to take 4 labor-hours. Budgeted variable manufacturing overhead cost per labor-hour is $12. The budgeted number of suits to be manufactured in June 2020 is 1,040.
• Actual variable manufacturing overhead costs in June 2020 were $52,164 for 1,080 suits started and completed. There were no beginning or ending inventories of suits. Actual direct manufacturing labor-hours for June were 4,536.
  1. Required
  2. 1. Compute the flexible-budget variance, the spending variance, and the efficiency variance for variable manufacturing overhead.
  3. 2. Comment on the results.
• 8-22. FIXED MANUFACTURING OVERHEAD, VARIANCE ANALYSIS (CONTINUATION OF 8-21). Esquire Clothing allocates fixed manufacturing overhead to each suit using budgeted direct manufacturing labor-hours per suit. Data pertaining to fixed manufacturing overhead costs for June 2020 are budgeted, $62,400, and actual, $63,916.
  1. Required
  2. 1. Compute the spending variance for fixed manufacturing overhead. Comment on the results.
  3. 2. Compute the production-volume variance for June 2020. What inferences can Esquire Clothing draw from this variance?