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Marie Designers is a maker of designer dresses. The cost of each dress is the sum of three variable costs (direct material costs, direct labour
Marie Designers is a maker of designer dresses. The cost of each dress is the sum of three variable costs (direct material costs, direct labour costs, and overhead costs) and one fixed-cost category (overhead costs). Variable overhead cost is allocated to each dress on the basis of budgeted direct labour-hours per dress. For June 2020, each dress is budgeted to take 8 labour hours. Budgeted variable overhead cost per labour-hour is $18. The budgeted number of dresses to be made in June 2020 is 2,080. Actual variable costs in June 2020 were $104,328 for 2,160 dresses started and completed. There were no beginning or ending inventories of dresses. Actual direct labour-hours for June were 9,072. a) Compute the flexible-budget variance, the spending variance, and the efficiency variance for variable manufacturing overhead. b) Comment on the spending and efficiency variances calculated
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