Question
The following data are the actual results for Marvelous Marshmallow Company for October.Actual output .................................................................................................................................9,000 casesActual variable overhead ................................................................................................................$405,000Actual fixed overhead .....................................................................................................................$122,000Actual machine time ......................................................................................................................40,500
The following data are the actual results for Marvelous Marshmallow Company for October.Actual output .................................................................................................................................9,000 casesActual variable overhead ................................................................................................................$405,000Actual fixed overhead .....................................................................................................................$122,000Actual machine time ......................................................................................................................40,500 machine hoursStandard cost and budget information for Marvelous Marshmallow Company follows: Standard variable-overhead rate ....................................................................................$9.00 per machine hourStandard quantity of machine hours ...............................................................................4 hours per case of marshmallowsBudgeted fixed overhead ...............................................................................................$120,000 per monthBudgeted output ...........................................................................................................10,000 cases per month Required:
1. Use any of the methods explained in the chapter to compute the following variances. Indicate whether each variance is favorable or unfavorable, where appropriate.
\a. Variable-overhead spending variance.
b. Variable-overhead efficiency variance.
c. Fixed-overhead budget variance.
d. Fixed-overhead volume variance.
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