Reference no: EM132947335
Question - Sheffield Company manufactures deep-sea fishing rods, which it distributes internationally through a chain of wholesalers. The following data are taken from the budget prepared at the beginning of the year by Sheffield's controller. The company applies overhead on the basis of machine hours.
Annual Budget May Budget
Variable manufacturing overhead 2,584,000 $221,000
Fixed manufacturing overhead $,203,120 $100,260
Direct Labor Hours $53,520 4,460
Machine Hours $258,400 22,100
During the month of May, Sheffield used 4,290 direct labor hours and 21,650 machine hours. The flexible budget for the month allowed 4,070 direct labor hours and 21,450 machine hours. Actual fixed manufacturing overhead incurred was $104,900; variable manufacturing overhead incurred was $213,500.
Required -
(a) Calculate the variable overhead spending and efficiency variances for May.
(b) Calculate the fixed overhead spending variance for May.