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 _________ ___________ __________
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The solution explains the calculation of various cost variances
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