Cedar Key Company produces handmade clamming buckets and sells them to distribut

Question

Cedar Key Company produces handmade clamming buckets and sells them to distributors along the Gulf Coast of Florida. The company incurred $9,400 of actual overhead costs $8,000 variable; $1,400 fixed) in May. Budgeted standard overhead costs for May were $4 of variable overhead costs per direct labor hour and $1,500 of fixed overhead costs. Normal capacity was set at 2,000 direct labor hours per month. In May, the company produced 10,100 clamming buckets by working 1,900 direct labor hours. The time standard is 0.2 direct labor hour per clamming bucket.

1. Compute the variable overhead spending and efficiency variances

2.Compute the fixed overhead budget and volume variances for May

Explanation / Answer

1:

Spending Variance = (AH x AR) - (AH x SR)
($***** ) - (***** DLHx x $* per DLH) = $**** U

Efficiency Variance = (AH x SR) - (SH x SR)
(****** DLHs x $* per DLH) - (**** DLHs x $* per DLH) = $* U

2:

Budget Variance = Actual FOH - Flexible budget FOH
$133,200 - $*** = $**** F

Volume Variance = Fixed portion of POR x (Denominator Hours - Standard Hours allowed)
$* per DLH (**** DLHs - **** units x * DLHs per unit) = $* F

*****************according to your need fill values in place of star************************

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.