In this text, we will be using which QuickBooks payroll option ...

[dakota nelson]

In this text, we will be using which QuickBooks payroll option
 a. Assisted
   b. Basic
   c. Enhanced
   d. Manual Payroll

Question 2

Fixed-manufacturing overhead, variance analysis
 
  Esquire Clothing allocates fixed manufacturing overhead to each suit using budgeted direct manufacturing labor-hours per suit. Data pertaining to fixed manufacturing overhead costs for June 2014 are budgeted, 62,400, and actual, 63,916.
 
  Required:
  1. Compute the spending variance for fixed manufacturing overhead. Comment on the results.
  2. Compute the production-volume variance for June 2014. What inferences can Esquire Clothing draw from this variance?

[mk6555]

Answer to Question 1

d

Answer to Question 2

1 & 2. =
=
= 15 per hour

Fixed Manufacturing Overhead Variance Analysis for Esquire Clothing for June 2014

Actual Costs Incurred
(1)
Same Budgeted
Lump Sum
(as in Static Budget)
Regardless of
Output Level
(2) Flexible Budget:
Same Budgeted
Lump Sum
(as in Static Budget)
Regardless of
Output Level
(3)
Allocated:
Budgeted Input Qty.
Allowed for Actual Output
 Budgeted Rate
(4)

63,916
62,400
62,400 (4  1,080  15)
64,800

1,516 U 2,400 F
Spending variance Never a variance Production-volume variance

1,516 U 2,400 F
Flexible-budget variance Production-volume variance

The fixed manufacturing overhead spending variance and the fixed manufacturing flexible budget variance are the same1,516 U. Esquire spent 1,516 more than the 62,400 budgeted amount for June 2014.
The production-volume variance is 2,400 F. This arises because Esquire utilized its capacity more intensively than budgeted (the actual production of 1,080 suits exceeds the budgeted 1,040 suits). This results in overallocated fixed manufacturing overhead of 2,400 (4  40  15). Esquire would want to understand the reasons for a favorable production-volume variance. Is the market growing? Is Esquire gaining market share? Will Esquire need to add capacity?