E23-20 Review the data from Great Fender given in Exercise E23-19. Consider the following additional information

QUESTION

E23-20 Computing overhead variances

E23-20 Review the data from Great Fender given in Exercise E23-19.
Consider the following additional information
Static budget variable overhead $ 5,500
Static budget fixed overhead $ 22,000
Static budget direct labor hours 550 hours
Static budget number of units 22,000 units

Great Fender allocates manufacturing overhead to production based on
standard direct labor hours. Great Fender reported the following actual results
for 2014:
actual variable overhead, $4,950; actual fixed overhead, $23,000.

Requirements
1.Compute the overhead variances for the year: variable overhead cost
variance, variable overhead efficiency variance, fixed overhead cost variance,
and fixed overhead volume variance.
2.Explain why the variances are favorable or unfavorable

ANSWER:

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