Question
The Bartlesville plant of Iverson Company produces an industrial chemical. At the beginning of the year, the Bartlesville plant had the following standard cost sheet:
The Bartlesville plant of Iverson Company produces an industrial chemical. At the beginĀning of the year, the Bartlesville plant had the following standard cost sheet:
Direct materials (10 lbs. @ $1.60) $16.00
Direct labor (0.75 hrs. @ $18.00) 13.50
Fixed overhead (0.75 hrs. @ $4.00) 3.00
Variable overhead (0.75 hrs.@ $3.00) 2.25
Standard cost per unit $34.75
The Bartlesville plant computes its overhead rates using practical volume, which is 72,000 units. The actual results for the year are:
Units produced: 70,000
Materials purchased: 744,000 pounds at $1.50
Materials used: 736,000 pounds
Direct labor: 56,000 hours at $17.90
Fixed overhead: $214,000
Variable overhead: $175,400
Required:
1. Compute the variable overhead spending, Fixed overhead , efficiency, and production volume variances (four way analysis of variance).
2. Prepare journal entries for factory overhead variances:
a. One way analysis of variance.
b. Two way analysis of variance.
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Budgeted Figures Units 72000 units Direct materials 10 lbs 160 720000 lbs 16 per lbs 1152000 Direct ...Get Instant Access to Expert-Tailored Solutions
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