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Talored Clothing is a manufacturer of designer suits. The cost of each suit is the sum of three vanable costs (direct matenal costs, direct manufacturing
Talored Clothing is a manufacturer of designer suits. The cost of each suit is the sum of three vanable costs (direct matenal costs, direct manufacturing labor costs and manufacturing overhead costs) and one fixed-cost category (manufactuning ovethead costs Vanable manufacturing overhead cost is alocated to each sut on the basis of budgeted direct manufacturing labor-hours per suit For June 2014, each suit is budgeted to take 3 labor-hours, Budgeted variable manufacturing overhead cost per labor-hour is $15. The budgeted number of suits to be manufactured in June 2014 is 1.180 ot Actual variable manufacturing costs in June 2014 were 372.960 for 1,140 suits started and completed There were no beginning or ending inventones of suits Actual direct manufactuning labor hours for June were 4 560 Requirements 1. Compute the fexble-budget variance the spending variance and the eficiency variance for variable manufacturing werhead 2. Comment on the resulits or Requirement 1. Compute the flexible budget variance, the spending variance, and the efliciency vanance for variable manufaturing over Begin by computing the following amounts for the variable manufacturing overhead Actual Input Oty Actual Costs Allocated Incurred Budgeted Rate Flexible Budget Overhead ow compute the variances Sesxible-budget vaniance, then spending vaance, and finally the efficiency vatriance. Label each vanance as favorable (F) or unfavarable ble Flexibe-budget variance Spending variance Efciency variance Sa
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