Efficiencyvariance 4500u never 3

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Unformatted text preview: the fixed manufacturing flexible budget variance are the same––$1,516 U. Esquire spent$1,516abovethe$62,400budgetedamountforJune2013.    The production ­‑volume variance is $2,400 F. This arises because Esquire utilized its capacity more intensively than budgeted (the actual productionof1,080suits exceedsthebudgeted1,040suits).Thisresultsin overallocated fixed manufacturing overhead of $2,400 (4 × 40 × $15). Esquire would want to understand the reasons for a favourable production ­‑volume variance. Is the market growing? Is Esquire gaining marketshare?WillEsquireneedtoaddcapacity?           8 ­‑21 (10−15min.) Four ­‑varianceanalysis,fillintheblanks.    Variable Fixed 1. Ratevariance $4,200U $3,000U 2. Efficiencyvariance 4,500U NEVER 3. Production ­‑volumevariance NEVER 600U 4. Flexible ­‑budgetvariance 8,700U 3,000U 5. Underallocated(overallocated)MOH 8,700U 3,600U  TheserelationshipscouldbepresentedinthesamewayasinExhibit8 ­‑4.    FlexibleBudget: Allocated:   BudgetedInput BudgetedInput   Qty. Qty.  ActualInput Allowe...
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