Flexible budgets and standard cost system

Question Help Deluxe Fender is a competitor of Deluxe Fender. Deluxe Fender also uses a standard cost system and provide the following information: EE(Click the icon to view the informa Deluxe Fender allocates manufacturing overhead to product labor hours, 370. tion based on standard direct labor hours. Deluxe Fender reported the following actual results for 2016: actual number of fenders produced, 20,000; actual variable overhead, $5,800; actual fixed overhead, $34,000; actual direct Read the requirements. Requirement 1. Compute the overh ad cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume variance. Begin with the variable overhead cost and efficiency variances. Select the required formulas, compute the variable overhead cost and efficiency variances, and identify whether each variance is favorable (F) or unfavorable (U). (Abbrevi FOH = fixed overhead, SC = standard cost; SQ = standard quantity, VOH = variable overhead.) Variance VOH cost variance VOH efficiency variance = i Requirements i Data Table 1. Compute the overhead variances for the year: variable overhead cost Static budget variable overhead $ 2,875 variance, variable overhead efficiency variance, fixed overhead cost variance, Static budget fixed overhead $ 23,000 and fixed overhead volume variance. Static budget direct labor hours 575 hours 2. Explain why the variances are favorable or unfavorable. Static budget number of units 25,000 units Standard direct labor hours 0.023 hours per fender Print Done Print Done