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Question - Esquire 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 2018, each suit is budgeted to take 4 labor-hours. Budgeted variable manufacturing overhead cost per labor- hour is $12. The budgeted number of suits to be manufactured in June 2018 is 1,040. Actual variable manufacturing costs in June 2018 were $52,164 for 1,080 suits started and completed. Actual direct manufacturing labor-hours for June were 4,536. There were no beginning or ending inventories of suits.
Required - Compute the flexible- budget variance, the spending variance, and the efficiency variance for variable manufacturing overhead.
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