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Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins
Edition 5ISBN: 0073526940Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins
Edition 5ISBN: 0073526940Overhead: Four-Variance Analysis The following information is available from Swinney Company for December:
Total factory overhead incurred | $40,000 |
Variable overhead expenses, incurred | $24,150 |
Fixed overhead expenses, budgeted | $18,000 |
Direct labor hours (DLH) worked | 4,200 |
Standard direct labor hours allowed for the units manufactured | 4,000 |
Practical capacity, in direct labor hours | 4,500 |
Standard variable overhead rate per DLH | $5.00 |
Swinney uses direct labor hours to apply factory overhead.
Required Use the framework presented in Exhibit 15.7 to compute the following for the month of
December:
1. Variable overhead spending variance.
2. Variable overhead efficiency variance.
3. Fixed overhead spending (budget) variance.
4. Fixed overhead production-volume variance.
5. Total overhead variance.
Verified
Step 1 of 7
Fixed overhead variance is the difference between overhead budgeted and actual overhead at the end. Fixed overhead variance includes following variances.
Spending (budget) variance
Production volume variance
Flexible budget variance
Step 2 of 7
Step 3 of 7
Step 4 of 7
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Step 7 of 7
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