Question
I need help with computing overhead variances the question or problem is: Grand Fender is a competitor of Pro Fender from exercise 23-19. Grand Fender
I need help with computing overhead variances the question or problem is: Grand Fender is a competitor of Pro Fender from exercise 23-19. Grand Fender also uses a standard cost system and provides the following information:
Static budget variable overhead $5,630 FOH Vol. $ 1,720 unfavorable
Static budget fixed overhead $ 22,520
Static budget direct labor hours 563 hours
Static budget number of units 21,000 units
Standard direct labor hours 0.026 Hours per fender
Grand Fender allocates manufacturing overhead to production based on standard direct labor hours. Grand Fender reported the following actual results for 2016:
actual number of fenders produced 20,000; actual variable overhead, $ 5,200; actual fixed overhead, $24,000; and the actual direct labor hours $480.
Requirements:
- Compute the overhead variance for the year; variable overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance and fixed overhead volume variance
- Explain why the variance are favorable or unfavorable.
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