Cte the fixed overhead flexible-budget variance

Question

Fixed Overhead Variances For March 2010 the Platter Valley factory of Bybee Industries budgeted $90,000 of fixed overhead. Its practical capacity is 2,500 direct labor hours per month (to manufacture 5,000 pairs of boots).

The factory spent 2,700 direct labor hours in March 2010 to manufacture 4,800 pairs of boots.

The actual fixed overhead incurred for the month was $92,000.

Required

1. Compute the spending (budget) variance and the production-volume variance for fixed overhead for March.

2. Compute the fixed overhead flexible-budget variance.

3. Provide appropriate journal entries to record the fixed overhead spending and fixed overhead production- volume variances for March.

4. Comment on the factory's results in March 2010 with regard to fixed overhead costs.

Answer 1

For this assignment, you have to consider the scenario and on the basis of the information provided and reading of the problem, solve and show the computation part. Fixed Overhead Variances for year March 2010 the Platter Valley factory of Bybee Industries budgeted $90,000 of fixed overhead. The practical capacity is 2,500 direct labor hrs per month (to produce 5,000 pairs of boots). The factory spends 2,700 direct labor hrs in March 2010 to produce 4,800 pairs of boots. The actual fixed overhead incurred for the particular month was $92,000. Discussion 1: Calculate the spending (or budget) variance and the production-volume variance for the fixed overhead for March. Discussion 2: Calculate the fixed overhead flexible-budget variance. Discussion 3: Give proper journal entries to record the fixed overhead spending and fixed overhead production- volume variances for the month March. Discussion 4: Review on factory's outcomes in March 2010 with regard to the fixed overhead costs.