Posted: 18 Feb 2010 at 03:26 | IP Logged
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ssham1976 wrote:
using yaeger logic cannot help me this this
can someone expand
Baby Frames, Inc., evaluates manufacturing overhead by using variance analysis. The following information applies to the month of May:
Actual Budgeted
Number of frames manufactured 19,000 20,000
Variable overhead costs $ 4,100 $2 per direct labor hour
Fixed overhead costs $ 22,000 $20,000; $1 per unit
Direct labor hours 2,100 hours 0.1 hour per frame
What is the production volume variance?
ans 1000 unfavorable
20000-19000 = 1000 ?
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Look at my post above. Volume variance is a FC variance.
Actual Budgeted OH
OH Applied
\ -------------------------------/ \-------------------------/
spending/budget variance volume variance
22,000 20,000 19,000
so spending variance is 2,000 U   ;   ;   ;
Volume variance is:
Actual quantity produced * Budgeted FC OH dollars
Activity (DLHRS/Machine HRS/etc)
Actual quantity produced: 19,000 * 1.00 (Bud FCOH/activity given to you) = 19,000 go back and plug 19,000 in for OH applied. Now calculate Volume variance: 20,000 - 19,000 = 1,000
__________________ Becker
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