Premium Fender uses a standard cost system and provide the following information: (Click the icon to view the information.) Premium Fender allocates manufacturing overhead to production based on standard direct labor hours. Premium Fender reported the following actual results for 2018: actual number of fenders produced, 20,000; actual variable overhead, $6,200; actual fixed overhead, $35,000; actual direct labor hours, 450. Read the requirements. Requirement 1. Compute the overhead variances for the year: variable overhead 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). (You may need to simply the formula based on the data provided. Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity; VOH = variable overhead.) Formula Variance VOH cost variance II II VOH efficiency variance II II Choose from any list or enter any number in the input fields and then continue to the next question. overhead cost variance, variable overhead efficiency variance, fixed overhead cost variance, and fixed overhead volume Requirement 1. Compute the ov, (AC-SC) XAQ variance. (AC - SC) x SQ Begin with the variable overhead (AQ - SQ) XAC favorable (F) or unfavorable (U). standard cost; SQ = standard qual (AQ - SQ) x SC Actual FOH - Allocated FOH Actual FOH - Budgeted FOH VOH cost variance Bugeted FOH - Allocated FOH ne required formulas, compute the variable overhead cost and efficiency variances, and identify whether each variance is ased on the data provided. Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = Variance VOH efficiency variance Data Table Static budget variable overhead $ 1,566 $ 31,320 Static budget fixed overhead Static budget direct labor hours 783 hours Static budget number of units Standard direct labor hours 29,000 units 0.027 hours per fender Print Print Done Done Now compute the fixed overhead cost and volume variances. Select the required formulas, compute the fixed overhead cost and volume variances, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) Formula Variance FOH cost variance II IIII FOH volume variance II Requirement 2. Explain why the variances are favorable or unfavorable. The variable overhead cost variance is cause management spent than budgeted for the actual production. The variable overhead efficiency variance is because management used direct labor hours than standard and variable overhead is applied (incurred) based on direct labor. The fixed overhead cost variance is because management spent than the amount budgeted for fixed overhead. The fixed overhead volume variance is because management allocated fixed overhead to jobs than was budgeted. Choose from any list or enter any num unfavorable Is and then continue to the next question. favorable Requirement 2. Explain why the variances are favorable or unfavorable. The variable overhead cost variance is because management spent than budgeted for the actual production. The variable overhead efficiency variance is because management used direct labor hours than standard and variable overhead is applied (incurred) based on direct labor. The fixed overhead cost variance is because management spent n the amount budgeted for fixed overhead. The fixed overhead volume variance is because management allocated fixed overhead to jobs than was budgeted. Choose from any list or enter any number in the input fields and then continue to ti less on more
