Case: Simple Jeans

Simple Jeans is preparing its budget for the next 12 months and uses zerobased budgeting. The budgeted sales price is $44.90 per unit and the budgeted volume of production and sales for the next 12 month period is 100,000 units. The material and labour requirements to produce one pair of jeans are as follows:

Direct Materials 2.5 m $6.50 per metre

Direct Labour 0.6 DLH $16.75 per labour hour

Machine hours are used to allocate both variable overheads and fixed overheads. Each pair of jeans uses 0.35 machine hours. The budgeted variable overhead costs are $1,170,000 while the budgeted fixed overhead costs are $356,200 for the year.

The picture attached below provided with the following detailed actual results and actual costs for the year.

Use the information to solve question A

Question 212 pts

Calculate the variable overhead efficiency variance for Simple Jeans.

Give your answer in 2 decimal places and in absolute dollar value (negative not required).

Flag question: Question 22

Question 222 pts

Calculate the fixed overhead spending variance for Simple Jeans.

Give your answer in 2 decimal places and in absolute dollar value (negative not required).

Flag question: Question 23

Question 232 pts

Calculate the fixed overhead production volume variance for Simple Jeans.

Give your answer in 2 decimal places and in absolute dollar value (negative not required).

Flag question: Question 24

Question 242 pts

Indicate whether each of the variances below is Favourable or Unfavourable for Simple Jeans.

Total sales volume variance [ Select ] ["Favourable", "Unfavourable"]

Total flexible budget variance [ Select ] ["Favourable", "Unfavourable"]

Sales volume variance for sales revenue [ Select ] ["Favourable", "Unfavourable"]

Sales volume variance for total variable costs [ Select ] ["Favourable", "Unfavourable"]

Flag question: Question 25

Question 252 pts

Indicate whether each of the variances below is Favourable or Unfavourable for Simple Jeans.

Sales price variance [ Select ] ["Favourable", "Unfavourable"]

Operating income variance [ Select ] ["Favourable", "Unfavourable"]

Direct Material price variance [ Select ] ["Favourable", "Unfavourable"]

Direct Labour rate variance [ Select ] ["Favourable", "Unfavourable"]

fx Simple Jeans