8 22 fixed manufacturing overhead variance analysis

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8-22 Fixed manufacturing overhead, variance analysis (continuation of 8-21).EsquireClothing allocates fixed manufacturing overhead to each suit using budgeted directmanufacturing labor-hours per suit. Data pertaining to fixed manufacturing overhead costs forJune 2017 are budgeted, $62,400, and actual, $63,916.Required:1.Compute the spending variance for fixed manufacturing overhead. Comment on the results.2.Compute the production-volume variance for June 2017. What inferences can EsquireClothing draw from this variance?SOLUTION
8-°
8-28 Straightforward coverage of manufacturing overhead, standard-costing system.TheBrazil division of an American telecommunications company uses standard costing for itsmachine-paced production of telephone equipment. Data regarding production during June are asfollows:Variable manufacturing overhead costs incurred$537,470Variable manufacturing overhead cost rate$7 per standard machine-hourFixed manufacturing overhead costs incurred$146,101Fixed manufacturing overhead costs budgeted$136,000Denominator level in machine-hours68,000Standard machine-hour allowed per unit of output1.2Units of output66,500Actual machine-hours used75,700

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Term
Fall
Professor
KING
Tags
Managerial Accounting, Variance, Esquire Clothing

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