Compute a fixed overhead variance analysis for each product

Reference no: EM131989011

Assignment

Sweetwater Company manufactures two products, Mountain Mist and Valley Stream. The company prepares its master budget on the basis of standard costs. The following data are for March:

Standards	Mountain Mist	Valley Stream
Direct materials	3 ounces at $14.90 per ounce	4 ounces at $17.10 per ounce
Direct labor	5 hours at $60.10 per hour	6 hours at $77 per hour
Variable overhead (per direct labor-hour)	$48	$53.10
Fixed overhead (per month)	$358,775	$398,580
Expected activity (direct labor-hours)	6,350	7,800
Actual results
Direct material (purchased and used)	3,700 ounces at $14.10 per ounce	4,600 ounces at $18.75 per ounce
Direct labor	4,960 hours at $62.25 per hour	7,470 hours at $81.60 per hour
Variable overhead	$254,550	$384,510
Fixed overhead	$319,950	$398,100
Units produced (actual)	1,060 units	1,210 units

Required:

a. Compute a variance analysis for each variable cost for each product.
b. Compute a fixed overhead variance analysis for each product.

Reference no: EM131989011

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