Purchase Solution

# Cost Variances

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1) Consider the following data for Said's Toothbrush Company:
Factory Overhead
Fixed Variable
Actual Costs Incurred \$28,000 \$26,500
Flex Budget for Standard Inputs
And Actual Outputs \$25,000 \$22,500
Costs Applied to Product \$23,200 \$22,500
Flex Budget for Actual Inputs \$25,000 \$22,300

From the above information, fill in the blanks below. Be sure to mark your variances F for favorable and U for Unfavorable.
a. Flexible-budget variance \$_________ Fixed \$__________________
Variable \$_______________
b. Production volume variance\$_________ Fixed \$__________________
Variable \$________________
c. Spending variance \$__________ Fixed \$__________________
Variable \$________________
d. Efficiency variance \$ __________ Fixed \$__________________
Variable \$________________

2) Study Appendix 13 (At the end of Chapter 13). Consider the following data regarding factory overhead:
Variable Fixed
Flex Budget for Actual Inputs \$90,000 \$140,000
Costs Applied to Product \$80,000 \$128,000
Flex Budget for Standard Inputs
& Actual Outputs ? Fill in ? Fill In
Actual Costs Incurred \$96,500 \$137,000
Using the data above, fill in the following blanks with the variance amounts. Use F for favorable or U for unfavorable for each variance.

Total Variable Fixed
a. Spending Variance _________ __________ __________
b. Efficiency Variance _________ __________ __________
c. Production-Volume Variance _________ ___________ __________
d. Flexible-Budget Variance _________ ___________ __________
e. Underapplied Overhead _________ ___________ __________

##### Solution Summary

The solution explains the calculation of various cost variances

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