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Acme Company's production budget for August is 17,900 units and includes the following component unit costs: direct materials, $8.0; direct labor, $10.4; variable overhead, $6.0. Budgeted fixed overhead is $36,000. Actual production in August was 18,135 units. Actual unit component costs incurred during August include direct materials, $8.60; direct labor, $9.80; variable overhead, $7.20. Actual fixed overhead was $37,900. The standard variable overhead rate per unit consists of $6.0 per machine hour

Acme Company's production budget for August is 17,900 units and includes the following component unit costs: direct materials, $8.0; direct labor, $10.4; variable overhead, $6.0. Budgeted fixed overhead is $36,000. Actual production in August was 18,135 units. Actual unit component costs incurred during August include direct materials, $8.60; direct labor, $9.80; variable overhead, $7.20. Actual fixed overhead was $37,900. The standard variable overhead rate per unit consists of $6.0 per machine hour

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter10: Standard Costing And Variance Analysis
Section: Chapter Questions
Problem 72P: Moleno Company produces a single product and uses a standard cost system. The normal production...
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Acme Company's production budget for August is 17,900 units and includes the following component unit costs: direct materials, $8.0; direct labor, $10.4; variable overhead, $6.0. Budgeted fixed overhead is $36,000. Actual production in August was 18,135 units. Actual unit component costs incurred during August include direct materials, $8.60; direct labor, $9.80; variable overhead, $7.20. Actual fixed overhead was $37,900. The standard variable overhead rate per unit consists of $6.0 per machine hour and each unit is allowed a standard of 1 hour of machine time. During August, $130,572 of actual variable overhead cost was incurred for 20,088 machine hours. Required: Calculate the variable overhead spending variance and the variable overhead efficiency variance. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).
Transcribed Image Text:Acme Company's production budget for August is 17,900 units and includes the following component unit costs: direct materials, $8.0; direct labor, $10.4; variable overhead, $6.0. Budgeted fixed overhead is $36,000. Actual production in August was 18,135 units. Actual unit component costs incurred during August include direct materials, $8.60; direct labor, $9.80; variable overhead, $7.20. Actual fixed overhead was $37,900. The standard variable overhead rate per unit consists of $6.0 per machine hour and each unit is allowed a standard of 1 hour of machine time. During August, $130,572 of actual variable overhead cost was incurred for 20,088 machine hours. Required: Calculate the variable overhead spending variance and the variable overhead efficiency variance. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).
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