Question
Ritchie Company uses a standard cost system for its production process. Ritchie Company applies overhead based on direct labor hours. The following information is available
Ritchie Company uses a standard cost system for its production process. Ritchie Company applies overhead based on direct labor hours. The following information is available for July:
| Standard: | |
| Direct labor hours per unit | 2.20 |
| Variable overhead per hour | $2.50 |
| Fixed overhead per hour | |
| (based on 11,990 DLHs) | $3.00 |
| Actual: | |
| Units produced | 4,400 |
| Direct labor hours | 8,800 |
| Variable overhead | $29,950 |
| Fixed overhead | $42,300 |
- What is the variable overhead spending variance?
| a. | $7,950 U |
| b. | $25 F |
| c. | $7,975 U |
| d. | $10,590 U |
- What is the variable overhead efficiency variance?
| a. | $9,570 F |
| b. | $9,570 U |
| c. | $2,200 F |
| d. | $2,200 U |
- What is the fixed overhead budget variance?
| a. | $15,900 U |
| b. | $6,330 U |
| c. | $6,930 U |
| d. | $935 F |
- What is the fixed overhead volume variance?
| a. | $6,930 U |
| b. | $13,260 U |
| c. | $0 |
| d. | $2,640 F |
Please provide rationale for answers
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
The Quest For A Science Of AccountingAn Anthology Of The Research Of Robert R. Sterling
Authors: Thomas A. Lee, Peter W. Wolnizer
1st Edition
0367698196, 9780367698195
