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Stafford Clothing is a manufacturer of designer suits. The cost of each suit is the sum of three variable costs (direct material costs, direct manufacturing labour costs, and manufacturing overhead costs), and one fixed-cost category (manufacturing overhead costs).Variable manufacturing overhead cost is allocated to each suit based on budgeted direct manufacturing labour-hours per suit.
Required
Problem 1. Calculate the flexible-budget variance, the spending variance, and the efficiency variance for variable manufacturing overhead.
Problem 2. Comment on the results.
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