1. SMITH Corporation produces a set of plastic tables. It produces the tables in batches. To manufacture a batch of the tables, it must set up the machines and molds. Setup costs are batch-level costs because they are associated with batches.

Some Setup overhead costs are variable and some are fixed with respect to the number of setup-hours. The following information is available for the month of December 2020.

Static-budget Actual

Amounts Amounts

Plastic tables produced and sold 60,000 56,000

Batch size (number of units per batch) 400 500

Setup-hours per batch 10 8

Variable overhead cost per setup hour $20 $18

Total fixed setup overhead costs $45,000 $42,000

Required: (14 points)

a. Calculate the efficiency variance for variable overhead setup costs. (4 points)

b. Calculate the spending variance for variable overhead setup costs. (2 points)

c. Calculate the flexible-budget variance for variable overhead setup costs. (2 points)

d. Calculate the spending variance for fixed overhead setup costs. (2 points)

e. Calculate the production-volume variance for fixed overhead setup costs. (4 points)

2. You are given the following information for the May overhead expenses as follows:

Budgeted output quantity 12,800

Budgeted fixed manufacturing overhead $80,000

Budgeted variable manufacturing overhead $20/direct labor hour

Budgeted direct manufacturing labor hours 8 hours/unit

Fixed manufacturing costs incurred $104,000

Direct manufacturing labor hours used 28,800

Variable manufacturing costs incurred $142,400

Actual quantity manufactured 13,600

Required: (11 points)

a. Compute a 4-variance analysis (4 points)

b. Compute a 3-variance analysis (3 points)

c. Compute a 2-variance analysis (2 points)

d. Compute the flexible-budget variance. (2 points)

3. XYZ Co. manufactured 37,500 units in this month. The following information is given:

Actual Static Budget

Production 18,750 units 17,000 units

Machine-hours 5,187.5 hours 5,100 hours

Fixed overhead costs $106,600 $102,000

What is the fixed overhead production-volume variance? ( 5 points)

4. The Haddad Co. produces 10,000 units of sunglasses during June. It consists of plastic and metal parts.

Direct Materials :

Standard cost: $5.00 per plastic and $15.00 per metal.

Total actual cost: $45,000.

Materials flexible-budget efficiency variance was $2500 unfavorable.

Direct Manufacturing Labor:

Standard cost is 25 sunglasses per hour at $100.00 per hour.

Actual cost per hour was $105.00.

Labor efficiency variance was $2500 favorable.

Required: (13 points)

a. What is the standard direct material amount per sunglass? (2 points)

b. What is the standard cost allowed for all units produced? (2 points)

c. What is the total direct materials flexible-budget variance? (2 points)

d. What is the direct material flexible-budget price variance? (2 points)

e. What is the total actual cost of direct manufacturing labor? (3 points)

f. What is the labor price variance for direct manufacturing labor? (2 points)

5. You are given the following table. Find the missing data. (show calculations) (10 points)

	Actual Results	Flexible Budget Variances	Flexible Budget	Sales-Volume Variances	Static Budget
Units sold	245,000		245,000		224,175
Revenues	$93,625	$2,500 F	(A)	$3,130 U	(B)
Variable costs	(C)	$445 U	$35,630	$5,400 F	$41,030
Fixed costs	$18,335	$1,870 F	$20,205	0	$20,205
Operating income	$39,215	(D)	$35,290	(E)	$33,020