Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Esquire Clothing is a manufacturer of designer suits. The cost of each suit is the sum of three variable costs (direct materiais costs, direct manufacturing
Esquire Clothing is a manufacturer of designer suits. The cost of each suit is the sum of three variable costs (direct materiais costs, direct manufacturing labour costs, and manufacturing overhead costs) and one fixed-cost category (manufacturing overhead costs). VMOH cost is allocated to each suit based on budgeted direct manufacturing labour-hours (DMLH) per suit. For June, each suit is budgeted to take 4 labour-hours. Budgeted VMOH costs per labour-hour are \$12.00. The budgeted number of suits to be manufactured in June is 1,060 and the actual number of suits started and completed is 1,020 Esquire Clothing allocates FMOH to each suit using budgeted DMLH per suit. Data pertaining to FMOH costs for June are $74,200 budgeted and $63,910 actual Required Required 1. Calculate the rate variance for FMOH. Comment on these results 2. Calculate the production-volume variance for June. What inferences can Esquire Clothing draw from this variance? 3. Calculate the over-or underallocated FMOH. What does this tell the management about June's performance? Begin by computing the following amounts for the FMOH Requirement 1. Calculate the rate variance for FMOH Corament on these tesults Now caiculate the rate vanance. Label the vanance as favourable (F) or unfavourable (U) Comment on these results The foxed manufacturing overtiead rato variance and the foxed manutactuing noxole-budgot varance are Esquire spent the budgoted amount for June Requirement 2. Calculale the production volume varance for June What inferences can Esquire Clothing draw trom this variance? Calculale the production-volume variance. Latel the vanance as tavourable (F) or untavourable (U) What inferences cah Esquare Clothing draw fram thes vanance?? The producton-volurne variance errses because the actual peoducbon of suts is chan the budyeded producbion This teruts in foed manistacturing overhosif Exquite Clothing may Want to cocisidor the Solowng for this type of produsbon.volume vitiance is the maike! 15 Eeginte induket shate? Whil Esquee need to Requirement 3. Caculate the ovef- of underallocathd FMoft. What does this inel itse manapoment about durkes pertormance? The fixed ftanutacturng overhead is by 1 Since thes teye is a comtonasen of variances are relatively whon comgared to the origrvil bydger (57, , 200) manogonnot stiould peobaly this vaitince
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started