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Edney Company employs a standard cost system for product costing. The per - unit standard cost of its product is: The manufacturing overhead rate is
Edney Company employs a standard cost system for product costing. The perunit standard cost of its product is:
The manufacturing overhead rate is based on a normal capacity level of direct labor hours. The firm has the following annual
manufacturing overhead budget:
Edney incurred $ in direct labor cost for direct labor hours to manufacture units in November. Other costs
incurred in November include $ for fixed manufacturing overhead and $ for variable manufacturing overhead.
Required:
Determine each of the following for November. Note: Indicate whether each variance is favorable or unfavorable
a The variable overhead rate spending variance.
b The variable overhead efficiency variance.
c The fixed overhead budget spending variance.
d The fixed overhead volume variance.
e The total amount of under or overapplied manufacturing overhead ie the total manufacturing overhead cost variance for the
period
Prepare the following four journal entries:
a to record actual variable overhead costs,
b to record actual fixed overhead costs,
c to record standard overhead costs applied to production, and
d to record all four overhead cost variances.
The company uses a single account, Factory Overhead, to record all overhead costs. Assume that the actual variable manufacturing
overhead consists of utilities payable of $ indirect materials of $all materials, direct and indirect, are recorded in a
single account, Materials Inventory and $ depreciation on factory equipment determined under the unitsofproduction
method Assume that the fixed manufacturing overhead consists of accrued salaries of $ and factory depreciation of
$ All accrued salaries should be recorded in a single account, Accrued Payroll.
Prepare the appropriate journal entry to close all manufacturing overhead variances to the cost of goods sold COGS account.
Assume the cost variances you calculated above are for the year, not the month.
Complete this question by entering your answers in the tabs below.
Determine each of the following for November. Note: Indicate whether each variance is favorable F or unfavorable U
a The variable overhead rate spending variance.
b The variable overhead efficiency variance.
c The fixed overhead budget spending variance.
d The fixed overhead volume variance.
e The total amount of under or overapplied manufacturing overhead ie the total manufacturing overhead cost variance for
the period
For all requirements, do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.
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