Required information Use the following information for the Quick Study below. (The following information applies to…
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Question “Required information Use the following information for the Quick Study below. (The following information applies to…”
Required information Use the following information for the Quick Study below. (The following information applies to the questions displayed below) Mosaic Company applies overhead using machine hours and reports the following information. Actual machine hours used (AH) 4,800 hours Standard machine hours (for actual production) 5.250 hours (SH) Actual variable overhead rate per hour (AVR) $ 4.90 Standard variable overhead rate per hour (SVR) $ 4.75 QS 21-18A Total variable overhead cost variance LO P5 Compute the total variable overhead cost variance and classify it as favorable, unfavorable or no variance. Actual Cost Standard Cost
Required information Use the following information for the Quick Study below. [The following information applies to the questions displayed below) Mosaic Company applies overhead using machine hours and reports the following information Actual machine hours used (AH) 4,800 hours Standard machine hours (for actual production) 5,250 hours (SH) Actual variable overhead rate per hour (AVR) $4.99 Standard variable overhead rate per hour (SVR) $ 4.75 QS 21-19A Overhead spending and efficiency variances LO P5 Compute the variable overhead spending variance and the variable overhead efficiency variance and classify each as favorable, unfavorable or no variance. Actual Cost Flexible Budget Standard Cost < Prev 10 of 12 Next >
Actual machine hours used (AH) 4,800 hours Standard machine hours (for actual production) (SH) Actual variable overhead rate per hour (AVR) $ 4.90 Standard variable overhead rate per hour (SVR) $ 4.75 QS 21-19A Overhead spending and efficiency variances LO P5 Compute the variable overhead spending variance and the variable overhead efficiency variance and classify each as favorable, unfavorable or no variance. Actual Cost Flexible Budget Standard Cost
Answer
Ans. 1 | Actual Price | Standard Price | |||
Actual hours * Actual rate | Standard hours * Rate at the hour | ||||
4,800 * $4.90 | 5,250 * $4.75 | ||||
$23,520 | $24,938 | ||||
$1,418 | |||||
Total overhead variance | $1,418 | Favorable | |||
Ans. 2 | |||||
Actual Price | Actual hours at the Standard rate | Standard Price | |||
Actual hours * Actual rate | Actual hours * Rates subject to change without notice | Standard hours * Rate at the hour | |||
4,800 * $4.90 | 4,800 * $4.75 | 5,250 * $4.75 | |||
$23,520 | $22,800 | $24,938 | |||
-$720 | $2,138 | ||||
Overhead spending variance | -$720 | or $720 Unfavorable | |||
Overhead efficiency variance | $2,138 | Favorable | |||
Total Overhead Variance | $1,418 | Favorable | |||
*If the standard cost, rate or hours is higher than the actual, it indicates that the variance is favorable. | |||||
*If the standard cost, rate or hours is lower than the actual, it indicates that the variance is not favorable. | |||||
Conclusion
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