Required information SB (Algo) The Platter Valley factory of Bybee Industries... [The following information applies to the questions displayed below.] The Platter Valley factory of Bybee Industries manufactures field boots. The cost of each boot includes direct materials, direct labor, and manufacturing (factory) overhead. The firm traces all direct costs to products, and it assigns overhead cost to products based on direct labor hours. The company budgeted $9 , 600 variable factory overhead cost, $92 , 000 for fixed factory overhead cost and 2,000 direct labor hours (its practical capacity) to manufacture 4,000 pairs of boots in March. The factory used 3,700 direct labor hours in March to manufacture 3,800 pairs of boots and spent $16 , 800 on variable overhead during the month. The actual fixed overhead cost incurred for the month was $95 , 000 . Exercises 15-31 (Algo) Three-Variance vs. Four-Variance Analysis of the Total Factory Overhead Cost Variance [LO 15-2, 15-3] The Platter Valley factory of Bybee Industries currently uses a four-variance analysis of the total factory overhead cost variance but is thinking of changing to a three-variance analysis. Required: 1. Compute the total overhead spending variance, the (variable overhead) efficiency variance, and the production volume variance for March and indicate whether each variance is favorable ( F ) or unfavorable ( U ) . 2. Prepare the appropriate journal entries at the end of March to record each of the following: (a) the total overhead spending variance, (b) the (variable overhead) efficiencv variance. and (c) the production volume variance. Assume that all overhead costs are recorded in Required information SB (Algo) The Platter Valley factory of Bybee Industries... [The following information applies to the questions displayed below.] The Platter Valley factory of Bybee Industries manufactures field boots. The cost of each boot includes direct materials, direct labor, and manufacturing (factory) overhead. The firm traces all direct costs to products, and it overhead cost to products based on direct labor hours. The company budgeted $9 , 600 variable factory overhead cost, $92 , 000 for fixed factory overhead cost and 2,000 direct labor hours (its practical capacity) to manufacture 4,000 pairs of boots in March. The factory used 3,700 direct labor hours in March to manufacture 3,800 pairs of boots and spent $16 , 800 on variable overhead during the month. The actual fixed overhead cost incurred for the month was $95 , 000 . Exercises 15-32 (Algo) Two-Variance vs. Four-Variance Breakdown of the Total Factory Overhead Cost Variance [LO 15-2] The Platter Valley factory of Bybee Industries uses a two-variance analysis of the total factory overhead variance. Required: 1. Compute the total flexible-budget variance for overhead and the production volume variance for March. What was the total factory overhead cost variance for March? Indicate whether each variance is favorable ( F ) or unfavorable ( U ) . 2. Determine the three components of the total flexible-budget variance for overhead (i.e., the variable overhead spending variance, the variable overhead efficiency variance, and the fixed overhead spending variance); in addition, show the production volume variance for March. Indicate whether each variance is favorable ( F ) or unfavorable ( U )
