Prepare a fixed overhead variance analysis

Assignment Help Accounting Basics

Reference no: EM13824624

Problem-

Met Towels plc. produces and sells standard bath towels. The company uses a standard costing system; the standards in use for the latest month of production (January 2005) are as follows:

Direct Material Usage	1.5 m2 of material per towel
Direct Material Cost	£2 / m2
Direct Labor Usage	0.1 hour per towel
Direct Labor Cost	£7.50 / hour
Machine Hours Usage	3 minutes per towel

For the month of January 2005, the company expected to produce 100,000 towels and use £240,000 in variable overhead and £155,000 in fixed overhead. The costing system applies VOH using machine hours and FOH using direct labor hours.

At the end of January 2005, the company actually produced 100,000 towels. Additional actual information is as follows:

Direct Material Used	135,000 m2 (amount used = amount purchased)
Direct Material Cost	£276,750
Direct Labor Hours	11,500 hours
Direct Labor Cost	£94,990
Machine Hours Used	290,000 minutes
Variable Overhead	£249,400
Fixed Overhead	£140,000

Required: Prepare a full cost variance analysis for Met Towels in January 2005.

Required:

1. Prepare a cost variance analysis for each variable cost component for Met Towels in January 2005.

2. Prepare a fixed overhead variance analysis for Met Towels in January 2005.

Additional information-

The problem belongs to Accounting and it discusses about calculation of cost variance analysis for variable cost component and fixed overhead variance analysis.

Reference no: EM13824624

Questions Cloud

Explain your rationale for the selected theory or model : Explain your rationale for the selected theory or model. Identify any biases associated with your institution, problem, and solution.

Sharing lottery money between two people : Pearsall and Alexander, friends for over 20 years, met twice a week after work at a liquor store. There they bought what they called a "package"- a half-pint of vodka, orange juice, two cups, and two lottery tickets. They then went to Alexander's ..

Currently use expert systems : Select two (2) companies that currently use expert systems. Then, discuss the fundamental advantages and disadvantages of using expert systems instead of human expertise within the companies that you have selected. Provide a rationale to support your..

Availability of the organization information assets : Organizational end users are generally in the background when it comes to protecting the IT infrastructure. As the chief security officer (CSO), develop a security awareness training communication plan for these users. Your plan must be in nontechnic..

Prepare a fixed overhead variance analysis : Prepare a cost variance analysis for each variable cost component for Met Towels in January 2005. Prepare a fixed overhead variance analysis for Met Towels in January 2005

Secure encrypted communications : Transmitting personal and business data and information over secure communication channels is critical. In some cases it is required, especially when personally identifiable information is being transmitted. Credit card numbers, Social Security Numbe..

The program by three-dimensional array : Write a small program that will read in 52 cards from a file, shuffle the cards, print the unshuffled deck to the screen, and print the shuffled deck into new file. The unshuffled deck of cards should be represented in the program by three-dimensiona..

Make a list of the field names and field types : 1.Make a list of the field names and field types you plan to include in the table. What fields are you going to put in this table? What are their field types? Would it make sense to reduce any of the field sizes? Do you need to add captions?

What is your plan for bringing about transformational change : What is your plan for bringing about the transformational change you envision? Why do you believe this approach will be successful?

User Account

All Pages