The following information relates to the month of April for The Kennedy Manufacturing Company, which uses a standard cost accounting system.
$\begin{array}{lrr}
\text {Actual total direct labor}&\$43,400\
\text {Actual direct labor hours used}&14,000\
\text {Standard hours allowed for actual output}&15,000\
\text { Variable overhead price variance - unfavorable }&\$1,400\
\text { Actual total overhead } & \$ 32,000 \
\text { Budgeted fixed costs } & \$ 9,000 \
\text { Normal activity in hours } & 12,00 \
\text { Total overhead application rate per DLH } & \$ 2.25
\end{array}$

Required:
(Be sure to indicate whether the variances are favorable or unfavorable.)
a. What is the variable overhead efficiency variance?
b. What is the fixed overhead spending variance?
c. What is the fixed production volume variance?

Question

The following information relates to the month of April for The Kennedy Manufacturing Company, which uses a standard cost accounting system.
 $\begin{array}{lrr}
\text {Actual total direct labor}&\$43,400\
\text {Actual direct labor hours used}&14,000\
\text {Standard hours allowed for actual output}&15,000\
\text { Variable overhead price variance - unfavorable }&\$1,400\
\text { Actual total overhead } & \$ 32,000 \
\text { Budgeted fixed costs } & \$  9,000 \
\text { Normal activity in hours } &  12,00 \
\text { Total overhead application rate per DLH } & \$ 2.25
\end{array}$
 
Required:
(Be sure to indicate whether the variances are favorable or unfavorable.)
a. What is the variable overhead efficiency variance?
b. What is the fixed overhead spending variance?
c. What is the fixed production volume variance?

Quizplus · Accepted Answer

The Answer of The following information relates to the month of April for The Kennedy Manufacturing Company, which uses a standard cost accounting system.
 $\begin{array}{lrr}
\text {Actual total direct labor}&\$43,400\
\text {Actual direct labor hours used}&14,000\
\text {Standard hours allowed for actual output}&15,000\
\text { Variable overhead price variance - unfavorable }&\$1,400\
\text { Actual total overhead } & \$ 32,000 \
\text { Budgeted fixed costs } & \$  9,000 \
\text { Normal activity in hours } &  12,00 \
\text { Total overhead application rate per DLH } & \$ 2.25
\end{array}$
 
Required:
(Be sure to indicate whether the variances are favorable or unfavorable.)
a. What is the variable overhead efficiency variance?
b. What is the fixed overhead spending variance?
c. What is the fixed production volume variance?

The Following Information Relates to the Month of April for the Kennedy