Esquire Clothing is a manufacturer of designer suits. For June 2017, each sult is budgeted to take 4 labor-hours. The budgeted number of suits to be manufactured in June 2017 is 1,040. Esquire Clothing allocates fixed manufacturing overhead to each sult using budgeted direct manutacturing labor-hours per suit. Data pertaining to fixed manufacturing overhead costs tor June 2017 are budgeted, $62,400, and actual, $63,916. In June 2017 there were 1,080 suits started and completed. There were no beginning or ending inventories of suits. Requirements Compute the spending varlance for tixed manutacturing overhead. Comment on the results. 2. Compute the production-volume variance for June 2017. What Inferences can Esquire Clothing draw from this variance? Requirement 1. Compute the spending variance for tixed manufacturing overhead. Comment on the results Begin by computing the following amounts for the fixed manufacturing overhead. Flexible Budget: Same Budgeted Same Budgeted Lump Sum Lump Sum Actual Costs Regardless of Regardless of Allocated Output Level Incurred Output Level Overhead Now compute the spending variance. Label the variance as favorable (F) or unfavorable (U). Spending variance Comment on the results. Esquire spent The fixed manufacturing overhead spending variance and the tixed manufacturing flexible budget variance are the budgeted amount for June 2017. Requirement 2. Compute the production-volume variance for June 2017. What inferences can Esquire Clothing draw from this variance? Compute the production-volume variance. Label the variance favorable (F) or unfavorable (U). Production-volume variance What inferences can Esquire Clothing draw from this variance? than the budgeted production. This results in fixed manufacturing overhead. The production-volume variance arises because the actual production of suits is Is Esquire Esquire Clothing may want market share? Will Esquire need to consider the following for this type of production-volume varlance. Is the market Esquire Clothing is a manufacturer of designer suits. For June 2017, each sult is budgeted to take 4 labor-hours. The budgeted number of suits to be manufactured in June 2017 is 1,040. Esquire Clothing allocates fixed manufacturing overhead to each sult using budgeted direct manutacturing labor-hours per suit. Data pertaining to fixed manufacturing overhead costs tor June 2017 are budgeted, $62,400, and actual, $63,916. In June 2017 there were 1,080 suits started and completed. There were no beginning or ending inventories of suits. Requirements Compute the spending varlance for tixed manutacturing overhead. Comment on the results. 2. Compute the production-volume variance for June 2017. What Inferences can Esquire Clothing draw from this variance? Requirement 1. Compute the spending variance for tixed manufacturing overhead. Comment on the results Begin by computing the following amounts for the fixed manufacturing overhead. Flexible Budget: Same Budgeted Same Budgeted Lump Sum Lump Sum Actual Costs Regardless of Regardless of Allocated Output Level Incurred Output Level Overhead Now compute the spending variance. Label the variance as favorable (F) or unfavorable (U). Spending variance Comment on the results. Esquire spent The fixed manufacturing overhead spending variance and the tixed manufacturing flexible budget variance are the budgeted amount for June 2017. Requirement 2. Compute the production-volume variance for June 2017. What inferences can Esquire Clothing draw from this variance? Compute the production-volume variance. Label the variance favorable (F) or unfavorable (U). Production-volume variance What inferences can Esquire Clothing draw from this variance? than the budgeted production. This results in fixed manufacturing overhead. The production-volume variance arises because the actual production of suits is Is Esquire Esquire Clothing may want market share? Will Esquire need to consider the following for this type of production-volume varlance. Is the market
