Question
Edney company employs standard absorption system for product costing. The standard cost of its product is as follows: Raw materials 14.50 Direct labor (2 DLH
Edney company employs standard absorption system for product costing. The standard cost of its product is as follows:
Raw materials 14.50
Direct labor (2 DLH @ P8) 16.00
Manufacturing overhead 22.00
The manufacturing overhead rate is based on normal activity level of 600,00 direct labor hours. During the year, Edney planned to produce 300,000 units. The budgeted annual manufacturing overhead is
Variable 3,600,0000
Fixed 3,000,000
During November, Edney Company produced 26,000 units. Edney used 53,500 direct labor hours in November at a cost of 433,350. Actual manufacturing overhead for the month was 260,000 fixed and 315,000 variable. The total manufacturing overhead applied during November was 572,000.
Requirements:
1. The variable manufacturing overhead spending variance for November
2. The variable manufacturing overhead efficiency variance for November
3. The fixed manufacturing overhead spending variance for November
4. The fixed manufacturing overhead efficiency variance for November
5. Total variance related to efficiency of the manufacturing operation for November
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