Comp24-1 (similar to) Question Help The Taylor Toy Company manufactures toy buil

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Comp24-1 (similar to) Question Help The Taylor Toy Company manufactures toy building block sets for chi dren. Taylor is planning for 2019 by developing a master budget by quarters. Taylors balance sheet for December 31, 2018, follows EEB (Click the icon to view the balance sheet.) Other budget data for Taylor Toy Company (Cick the icon to view the other data.) Read the recuirements Budget Amounts Per Unit Flexible Budget Variance Sales olume Variance Actual Flexible Static Results Budget Budget 5,700 5,700 Units Net Sales Revenue Variable Costs. 4,900 $ 70.00 $ 399,000 S 0 399,000 $ 5,000 F 343,000 1,000 U 76,063 97,765 21,697 03,990560 Producd Costs 98,765 9900 296,245 Selling and Admin. Costs Contribution Margin 1,000 U 297245 33,743 F 263,502 Fbed Costs 50,812 62.400 183,033 S 1,500 F 52,312 62,400 52,312 62.400 148.790 Product Costs Seling and Admin Costs 500182,533 $ 33.743 Operating Income Choose from any list or enter any number in the input fields and then cdlick Check Answer

Explanation / Answer

Given Information is,

Actual output units = 5,700 sets;

Standard hours per unit = 0.4 hours per set;

Standard rate per hour = $ 14 per hour;

Actual no. of hours worked = 2,270 hours;

Actual overhead rate per hour = $ 13.90 per hour.

The above details are regarding the variable overhead.

Standard Variable OH rate p.u. = $14 x 0.4hours = $ 5.6 per set

1. VOH Cost Variance:

= Standard Variable Overhead - Actual Variable OH

= Standard Variable OH rate p.u. x actual output - actual variable OH

= $ 5.6 x 5,700 - $ 31,553

= $ 31,920 - $ 31,553

= $ 367 Favorable.

2. VOH efficiency variance:

= (Standard hours for Actual Production - Actual hours worked) x Actual VOH per hour

= (0.4 hours x 5,700 - 2,270 hours) x $ 13.90 per hour

= ( 2,280 - 2,270 ) x $ 13.90

= $ 139 Favorable.

Therefore, VOH cost variance is $ 367 Favorable; VOH efficiency variance is $ 139 Favorable.

Hope this is helpful!!

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