Requirements

1. Compute the spending variance for fixed manufacturing overhead. Comment on the results.

2. Compute the production-volume variance for June 2017. What inferences can Radiance Clothing draw from this variance?

Radiance Clothing is a manufacturer of designer suits. For June 2017, each suit is budgeted to take 3 labor-hours. The budgeted number of suits to be manufactured in June 2017 is 1,020. Radiance Clothing allocates fixed manufacturing overhead to each suit using budgeted direct manufacturing labor-hours per suit. Data pertaining to fixed manufacturing overhead costs for June 2017 are budgeted, $52,020, and actual, $63,930. In June 2017 there were 1,080 suits started and completed. There were no beginning or ending inventories of suits. Requirements 1. Compute the spending variance for fixed manufacturing overhead. Comment on the results. 2. Compute the production-volume variance for June 2017. What inferences can Radiance Clothing draw from this variance? I. Requirement 1. Compute the spending variance for fixed manufacturing overhead. Comment on the results. Begin by computing the following amounts for the fixed manufacturing overhead. Flexible Budget: Same Budgeted Lump Sum Regardless of Output Level Same Budgeted Lump Sum Regardless of Output Level Actual Costs Incurred Allocated Overhead