Ever-Sharp Lawnmowers Ltd. controls variable manufacturing overhead costs with assembly-line hours as the denominator. Fixed manufacturing...

 

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Ever-Sharp Lawnmowers Ltd. controls variable manufacturing overhead costs with assembly-line hours as the denominator. Fixed manufacturing overhead costs are applied on a unit-of-output basis totals lawnmower is allowed 10 assembly-line hours and standard variable manufacturing overhead totals 600 per unit. Budgeted fixed manufacturing overhead totals $29,400 for 420 lawnmowers. During July 4,200 assembly-line hours were incurred and 400 lawnmowers were produced. Actual manufacturing overhead costs for July were $260,400 for variable expenses and $32,300 for fixed expenses. Required: a. Compute the Variable overhead rate variance and efficiency variance. Ensure you indicate Favorable or Unfavorable for each variance. (4 marks) b. Compute the Fixed overhead rate variance and production volume variance. Ensure you indicate Favorable or Unfavorable for each variance.(4 marks) Ever-Sharp Lawnmowers Ltd. controls variable manufacturing overhead costs with assembly-line hours as the denominator. Fixed manufacturing overhead costs are applied on a unit-of-output basis totals lawnmower is allowed 10 assembly-line hours and standard variable manufacturing overhead totals 600 per unit. Budgeted fixed manufacturing overhead totals $29,400 for 420 lawnmowers. During July 4,200 assembly-line hours were incurred and 400 lawnmowers were produced. Actual manufacturing overhead costs for July were $260,400 for variable expenses and $32,300 for fixed expenses. Required: a. Compute the Variable overhead rate variance and efficiency variance. Ensure you indicate Favorable or Unfavorable for each variance. (4 marks) b. Compute the Fixed overhead rate variance and production volume variance. Ensure you indicate Favorable or Unfavorable for each variance.(4 marks)

Answer rating: 100% (QA)

a Variable overhead rate variance Actual variable overhead 260400 Actual assemblyline hours 4200 Act... View the full answer