Solution-Calculate the fixed overhead spending variance for

Calculate the fixed overhead spending variance for May

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Question - Sunland 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 Sunland's controller. The company applies overhead on the basis of machine hours.

	Annual Budget	May Budget
Variable manufacturing overhead	$1,817,900	$158,900
Fixed manufacturing overhead	$1,201,200	$100,100
Direct labor hours	50,880	4,240
Machine hours	259,700	22,700

During the month of May, Sunland used 4,210 direct labor hours and 21,700 machine hours. The flexible budget for the month allowed 4,110 direct labor hours and 21,260 machine hours. Actual fixed manufacturing overhead incurred was $106,600; variable manufacturing overhead incurred was $150,900.

Required -

(a) Calculate the variable overhead spending and efficiency variances for May.

(b) Calculate the fixed overhead spending variance for May.

Reference no: EM133045665

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Calculate the fixed overhead spending variance for May

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