Chap15 excel template - Ex. 15-31: Variable Factory...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Ex. 15-31: Variable Factory Overhead Variances Budgeted variable factory overhead $15,000 Budgeted direct labor hours 2,500 Budgeted production in pairs of boots 5,000 Actual variable factory overhead $15,600 Actual direct labor hours 2,700 Actual production in pairs of boots 4,800 Solution The Platter Valley factory of Bybee Industries manufactures field boots. The cost of each boot includes direct materials, dir labor, and factory overhead. The firm traces all direct costs to products and assigns overhead based on direct labor hours. The firm budgeted $15,000 variable factory overhead and 2,500 direct labor hours to manufacture 5,000 pairs of boots in March 2010. The factory spent 2,700 direct labor hours in March 2010 to manufacture 4,800 pairs of boots and spent $15,600 on variable factory overhead during the month. Required 1. Compute the flexible-budget variance, the spending variance, and the efficiency variance for variable overhead for Mar 2. Provide appropriate journal entries to record the variable overhead spending and efficiency variances. 3. Comment on the factory’s operation in March 2010 with regard to variable overhead.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Ex. 15-32: Fixed Overhead Variances Budgeted fixed factory overhead $90,000 Budgeted direct labor hours 2,500 Budgeted production in pairs of boots 5,000 Actual fixed factory overhead $92,000 Actual direct labor hours 2,700 Actual production in pairs of boots 4,800 Solution (Continuation of Exercise 15-31.) For March 2010, the Platter Valley factory of Bybee Industries budgeted $90,000 fixed factory overhead. Its practical capacity is 2,500 direct labor hours per month (to manufacture 5,000 pairs of boots). The factory spent 2,700 direct labor hours in March 2010 to manufacture 4,800 pairs of boots. The actual fixed overhead incurred for the month was $92,000. Required 1. Compute the spending (budget) variance and the production-volume variance for fixed overhead. 2. Compute fixed overhead flexible budget variance. 3. Provide appropriate journal entries to record the fixed overhead spending and fixed overhead production- volume variances for March. 4. Comment on the factory’s operation in March 2010 with regard to fixed overhead costs.
Background image of page 2
Budgeted variable factory overhead $15,000 Budgeted direct labor hours 2,500 Budgeted production in pairs of boots 5,000 Actual variable factory overhead $15,600 Actual direct labor hours 2,700 Actual production in pairs of boots 4,800 Budgeted fixed factory overhead $90,000 Actual fixed factory overhead $92,000 Solution (Continuation of Exercises 15–31 and 15–32): The Platter Valley factory of Bybee Industries uses three- variance analysis to determine factory overhead variances. Required
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 43

Chap15 excel template - Ex. 15-31: Variable Factory...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online