Question 1 You have recently been hired by Closure Company, which produces windo

Question

Question 1

You have recently been hired by Closure Company, which produces windows for personal homes. Based on the following information prepare a flexible budget for 3000, 3500 and 4000 units.

Direct Materials per Unit: $15.00

Direct Labor per Unit: $20.00

Variable Overhead Cost per Unit: $5.00

Fixed Overhead: $50,000 per year

Question 2

Based on the flexible budget from scenario 1, prepare a performance report if the company has the following actual costs for 3,500 units this month:

Actual production was 3,500 units.

Actual Direct Materials were $53,000

Actual Direct Labor costs were $69,500

Actual Variable Overhead costs were $18,000

Actual Fixed Overhead costs were $50,000

Question 3

Pull Company has the following information for the month. Compute the Variable Overhead Spending Variance, Variable Overhead Efficiency Variance and the Total Variable Overhead Variance based on the following information:

Standard Variable Overhead rate: $5.00 per Direct Labor Hour

Actual Variable Overhead Costs: $9,000

Standard hours allowed per unit: .50 hours

Actual direct labor hours worked: 1,700 hours

Units produced: 3,500

Explanation / Answer

ans 1 Flexible Budget Expenses per unit cost (working) No. of units 3000 3500 4000 Direct material 15 45000 52500 60000 Direct labor 20 60000 70000 80000 Varaible overhead 5 15000 17500 20000 Fixed overhead 50000 50000 50000 Total 170000 190000 210000 ans 2 Actual cost Flexible Budget Varaince Direct material 53000 52500 500 U Direct labor 69500 70000 500 F Varaible overhead 18000 17500 500 U Fixed overhead 50000 50000 0 None Total 190500 190000 500 U ans 3 Varaible overhead efficiency variance SR*(AH-SH allowed 250 F 5*(1700-(3500*.5)) -250 Variable overhead spending variance 9000-(1700*5) 500 U Total variable overhead varaince -250+500 250 U

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