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Simpson Manufacturing has the following standard cost sheet for one of its products: The company uses a standard cost system and applies factory overhead cost
Simpson Manufacturing has the following standard cost sheet for one of its products:
The company uses a standard cost system and applies factory overhead cost based on direct labor hours and determines the fac
overhead rate based on a practical capacity of units of the product.
Simpson has the following actual operating results for the year just completed:
Units nanufactured
Direct materials purchased and used
Direct labor incurred
Variable factory overhead incurred
Fixed factory overhead incurred
Before closing the perlodic accounts, the standard cost entrles in selected accounts follow.
Required:
Determine for the perlod the following Items:
a Flexible budget for varlable factory overhead cost based on output for the perlod.
b Total varlable overhead cost applied to production during the perlod.
c Total budgeted fixed factory overhead cost.
d Total fixed factory overhead cost applied to production during the perlod.
Compute the following factory overhead cost varlances using a fourvarlance analysls:
a Total varlable overhead cost varlance.
b Varlable overhead spending varlance.
c Varlable overhead efficlency varlance.
d Total underapplied or overapplied varlable overhead.
e Flxed overhead spending varlance.
f Fixed overhead production volume varlance.
g Total fixed overhead cost varlance.
h Total underapplied or overapplied fixed overhead.
Compute the following factory overhead cost varlances using threevarlance analysis:
a Overhead spending varlance.
b Overhead efficlency varlance.
c Fixed overhead production volume varlance.
Compute the total overhead flexiblebudget varlance and the fixed overhead production volume varlance using a twovarlance
analysis.
Using a single overhead account eg Factory Overhead make proper journal entrles for:
a Incurrence of factory overhead costs.
b Application of factory overhead costs to production.
c Identlication of overhead varlances assuming that the firm uses the fourvarlance analysis identfied in requirement
d Close all factory overhead cost items and thelr varlances of the perlod if:
The firm closes all varlances to the Cost of Goods Sold account.
The firm prorates varlances to the Inventory accounts and the Cost of Goods Sold account.
Complete this question by entering your answers in the tabs below.
Compute the following factory overhead cost variances using a fourvariance analysis:
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