Purefoy, Inc., produces chemicals for large biotech companies. It has the follow
ID: 2575390 • Letter: P
Question
Purefoy, Inc., produces chemicals for large biotech companies. It has the following data for manufacturing overhead costs during August 2017 Requirement Fill in the blanks. Use F for favorable and U for unfavorable: Variable Fixed (Click the icon to view the table.) Actual costs incurred Costs allocated to products Flexible budget Actual input x budgeted rate $35,500 $15,500 32,000 13,800 14,600 30,600 (If no variance exists leave the dollar value blank. Label the variance as favorable (F), unfavorable (U) or never a variance (N)1 Variable Fixed (1) Spending variance (2) Efficiency variance (3) Production-volume variance (4) Flexible-budget variance (5) Underallocated (overallocated) Choose from any list or enter any number in the input fields and then continue to the next question.Explanation / Answer
Variable overhead spending variance = Actual cost incurred - (Actual input x Budgeted rate)
= 35500 - 30600 = $4900 U
Fixed overhead spending variance = Budgeted - Actual
= $14600 - $15500
= 900 U
Variable overhead efficiency variance = (SH - AH) x SR
= (SH x SR) - (AH x SR)
= 32000 - 30600
= 1400 F
Fixed overhead production volume variance = Cost allocated to products - Flexible budget
= $13800 - $14600
= 800 U
Variable overhead flexible budget variance = Actual cost incurred - Cost allocated to products
= $35500 - $32000
= $3500 F
Fixed overhead flexible budget variance = Flexible budget - Actual results
= $14600 - $15500
= 900 U
Fixed overhead underallocated = Flexible budget - Actual results
= $14600 - $15500
= 900 U
Fixed overhead underallocated = $15500 - $13800 = $1700
Variable Fixed (1) Spending variance 4900 U 900 U (2) Efficiency variance 1400 F N (3) Production-volume variance N 800 U (4) Flexible-budget variance 900 U 900 U (5) Underallocated (overallocated) manufacturing overhead 900 U 1700Related Questions
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