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Production Variances Question: Hello, I hope all is well. Given the information below, if you could please show the computations for all variances (price variances,
Production Variances Question: Hello, I hope all is well. Given the information below, if you could please show the computations for all variances (price variances, spending variances, efficiency variances (if possible), and production volume variances).
The Johnson Company uses a standard cost system. This month's data regarding its product follows: Budgeted price of materials: $1.00 per pound Budgeted pounds of material: 3 pounds per unit of output Budgeted direct labor cost: $4.00 per direct labor hour Budgeted direct labor hours: 5 hours per unit of output Budgeted variable overhead cost: $0.90 per direct labor hour Denominator activity level per month: 2500 units Materials purchased and used: 6,700 pounds at a total cost of $6,200 Direct labor costs incurred: $41,800 for 11,000 hours Variable overhead costs incurred: $9,500 Fixed overhead costs incurred: $6,150 Fixed overhead spending variance: $ 100 favorable Units produced this month: 2,000 Units sold this month: 500 Assume absorption costing is used for product costing. Required: Calculate all variancesStep by Step Solution
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