Question
Grand Clothing is a manufacturer of designer suits. The cost of each suit is the sum of three variable costs (direct material costs, direct manufacturing
Grand Clothing is a manufacturer of designer suits. The cost of each suit is the sum of three variable costs (direct material costs, direct manufacturing labor costs, and manufacturing overhead costs) and one fixed-cost category (manufacturing overhead costs). Variable manufacturing overhead cost is allocated to each suit on the basis of budgeted direct manufacturing labor-hours per suit. For June 2013, each suit is budgeted to take 44 labor-hours. Budgeted variable manufacturing overhead cost per labor-hour is $ 14. The budgeted number of suits to be manufactured in June 2013 is 1,020. Actual variable manufacturing costs in June 2013 were $ $67,650 for 1,000 suits started and completed. There were no beginning or ending inventories of suits. Actual direct manufacturing labor-hours for June were 4,510. Requirements 1. Compute the flexible-budget varian
Compute the flexible-budget variance, the spending variance, and the efficiency variance for variable manufacturing overhead. | |
2. | Comment on the results |
ce, the spending variance, and the efficiency variance for variable manufacturing overhead.
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