Question
Variable manufacturing overhead cost is allocated to each suit on the basis of budgeted direct manufacturing labor-hours per suit. For June 20172017, each suit is
Variable manufacturing overhead cost is allocated to each suit on the basis of budgeted direct manufacturing labor-hours per suit. For June
20172017,
each suit is budgeted to take
44
labor-hours. Budgeted variable manufacturing overhead cost per labor-hour is
$ 11$11.
The budgeted number of suits to be manufactured in June
20172017
is
1 comma 0401,040.
Actual variable manufacturing costs in June
20172017
were
$ 45 comma 700$45,700
for
1 comma 0601,060
suits started and completed. There were no beginning or ending inventories of suits. Actual direct manufacturing labor-hours for June were
4 comma 5704,570.
RegalRegal
Clothing is a manufacturer of designer suits. The cost of each suit is the sum of three variable costs (direct material costs, direct manufacturing labor costs, and manufacturing overhead costs) and one fixed-cost category (manufacturing overhead costs).
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.
Requirement 1. Compute the flexible-budget variance, the spending variance, and the efficiency variance for variable manufacturing overhead.
Begin by computing the following amounts for the variable manufacturing overhead.
| Actual Input Qty. |
| |
Actual Costs | x |
| Allocated |
Incurred | Budgeted Rate | Flexible Budget | Overhead |
|
|
|
|
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