ACC350 Cost Accounting 8-16 - E8-16 Esquire Clothing is a...

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E8-16 Esquire 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). Variable manufacturing overhead cost is allocated to each suit on the basis of budgeted direct manufacturing labor-hours per suit. For June 2014, each suit is budgeted to take 44 labor-hours. Budgeted variable manufacturing overhead cost per labor- hour is $12. The budgeted number of suits to be manufactured in June 2014 is 1,040. Actual variable manufacturing costs in June 2014 were $52,164 for 1,080 suits started and completed. There was no beginning or ending inventories of suits. Actual direct manufacturing labor-hours for June were 4,536. Requirements 1. Compute the flexible-budget variance, the spending variance, and the efficiency variance for variable manufacturing overhead.

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