.Calculate the efficiency variance for variable setup overhead costs X Industries, Inc., produces air purifiers. X, Inc., produces the air purifiers in batches. To manufacture a batch of the purifiers, X, Inc., must set up the machines and assembly line tooling. Setup costs are batch-level costs because they are associated with batches rather than individual units of products. A separate Setup Department is responsible for setting up machines and tooling for different models of the air purifiers. Setup overhead costs consist of some costs that are variable and some costs that are fixed with respect to the number of setup-hours. The following information pertains to June 2008: Budget Actual Amounts Amounts 10,000 Units produced and sold Batch size (number of units per batch) Setup-hours per batch Variable overhead cost per setup-hour Total fixed setup overhead costs 9,000 400 375 6 5.5 $50 $52 $18,000 $17,750 $114 favorable $264 unfavorable $264 favorable $150 favorable $250 favorable O
.Calculate the efficiency variance for variable setup overhead costs X Industries, Inc., produces air purifiers. X, Inc., produces the air purifiers in batches. To manufacture a batch of the purifiers, X, Inc., must set up the machines and assembly line tooling. Setup costs are batch-level costs because they are associated with batches rather than individual units of products. A separate Setup Department is responsible for setting up machines and tooling for different models of the air purifiers. Setup overhead costs consist of some costs that are variable and some costs that are fixed with respect to the number of setup-hours. The following information pertains to June 2008: Budget Actual Amounts Amounts 10,000 Units produced and sold Batch size (number of units per batch) Setup-hours per batch Variable overhead cost per setup-hour Total fixed setup overhead costs 9,000 400 375 6 5.5 $50 $52 $18,000 $17,750 $114 favorable $264 unfavorable $264 favorable $150 favorable $250 favorable O
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 4CE: Larsen, Inc., produces two types of electronic parts and has provided the following data: There are...
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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