50) Managerial Financial Accounting Assignments AE11-12 Solution

50) Managerial Financial Accounting Assignments AE11-12 Solution

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AE11-12
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Incorrect. Calculating Labor and Overhead Variances [LO 3,4] At the start of 2012, Textile Express Company determined its standard labor cost to be 2.5 hours per unit at $24.10 per hour. The budget for variable overhead was $9 per unit, and budgeted fixed overhead was $15,000 for the year. Expected annual production was 5,000 units. During 2012, the actual cost of labor was $24.30 per hour. Textile Express produced 4,900 units requiring 11,800 direct labor hours. Actual overhead for the year was $51,530. Calculate labor rate and efficiency variances and the controllable overhead variance and the overhead volume variance. (Round calculations to 2 decimal places, e.g. 25.21 and the final answers to 0 decimal places, e.g. 5,250. For negative numbers use either a negative sign
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Unformatted text preview: preceding the number, e.g. -45 or parenthesis, e.g. (45).) Labor Rate Variance $[no answer] unfavorable Labor Efficiency Variance $[no answer] favorable Controllable Overhead Variance $[no answer] favorable Overhead Volume Variance $[no answer] unfavorable Click here if you would like to Show Work for this question AE11-12 Labor Rate Variance = (AR - SR) AH = ($24.30 - $24.10) 11,800 = $2,360 unfavorable Labor Efficiency Variance = (AH - SH) SR = (11,800 - 12,250) $24.10 = ($10,845) favorable Standard hours = 4,900 2.5 hours per pair = 12,250 hours Controllable Overhead Variance = Actual overhead - Flexible budget level of overhead for actual production = $51,530 - [$15,000 + ($9 4,900)] = $51,530 - $59,100 = ($7,570) favorable...
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This note was uploaded on 08/02/2011 for the course MGMT 425 taught by Professor Brown/lexner during the Spring '11 term at Kaplan University.

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50) Managerial Financial Accounting Assignments AE11-12 Solution

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