Compute the flexible-budget variance

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Reference no: EM132080961

Question: Top minus NotchTop-Notch Clothing is a manufacturer of designer suits. The cost of each suit is the sum of three variable costs? (direct material? costs, direct manufacturing labor? costs, and manufacturing overhead? costs) and one? fixed-cost category?(manufacturing overhead? costs). Variable manufacturing overhead cost is allocated to each suit on the basis of budgeted direct manufacturing? labor-hours per suit. For June? 2012, each suit is budgeted to take four ?labor-hours. Budgeted variable manufacturing overhead cost per? labor-hour is $12.The budgeted number of suits to be manufactured in June 2012 is 1,140.

Actual variable manufacturing costs in June 2012 were $51,865 for 601,160 suits started and completed. There were no beginning or ending inventories of suits. Actual direct manufacturing? labor-hours for June were 104,510.

Requirements: 1. Compute the flexible-budget variance, the spending variance, and the efficiency variance for variable manufacturing overhead.

Flexible-budget variance

Spending variance

Efficiency variance

Reference no: EM132080961

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