Question
Use the following information to answer questions Q8-Q10: MM Company makes motorcycle ignition switches. It uses a standard cost system and carries all inventories at
Use the following information to answer questions Q8-Q10:
MM Company makes motorcycle ignition switches. It uses a standard cost system and carries all inventories at standard. The standard manufacturing overhead costs per switch are based on direct labor hours. You are given the following information:
- The standard direct labor hours per unit = 5 direct labor hours.
- Budgeted variable overhead rate = $10 per direct labor hour.
- 46,000 switches were produced although 40,000 switches were scheduled to be produced.
- 225,000 direct manufacturing labor hours were worked.
- Actual variable manufacturing overhead costs = $2,680,000.
- Actual fixed manufacturing overhead costs = $2,950,000.
- Budgeted fixed manufacturing overhead = $2,750,000.
- Fixed manufacturing overhead allocated = $2,870,00.
Required: Answer the following questions (Q8 Q10):
Q8.a The variable overhead efficiency variance is $.............
Q8.b The variance type in the question above is (put 1 if favorable, or 2 if unfavorable) .
Q9. a The spending variance for variable overhead is $.............
Q9.b The variance type is (put 1 if favorable, or 2 if unfavorable) .
Q10.a The spending variance for fixed overhead is $............
Q10.b The variance type is (put 1 if favorable, or 2 if unfavorable) .
Q11.a The fixed manufacturing overhead production volume variance is $............
Q11.b The variance type is (put 1 if favorable, or 2 if unfavorable) .
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