Marvelous Marshmallow Company -the following data are the actual results for Marvelous Marshmallow Company for October

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Description

the following data are the actual results for Marvelous Marshmallow Company for October.
Actual output ………………………………………………………………………………………………………………… 9,000 cases
Actual variable overhead …………………………………………………………………………………………………. $405,000
Actual fixed overhead ……………………………………………………………………………………………………… $122,000
Actual machine time ………………………………………………………………………………………………………. 40,500 machine hours
Standard cost and budget information for Marvelous Marshmallow Company follows:
Standard variable-overhead rate ………………………………………………………………………… $9.00 per machine hour
Standard quantity of machine hours ……………………………………………………………………. 4 hours per case of marshmallows
Budgeted fixed overhead ………………………………………………………………………………….. $120,000 per month
Budgeted output …………………………………………………………………………………………….. 10,000 cases per month
Required:
1. Use any of the methods explained in the chapter to compute the following variances. Indicate
whether each variance is favorable or unfavorable, where appropriate.
a. Variable-overhead spending variance.
b. Variable-overhead efficiency variance.
c. Fixed-overhead budget variance.
d. Fixed-overhead volume variance.
2. Build a spreadsheet: Construct an Excel spreadsheet to solve the preceding requirement. Show
how the solution will change if the following information changes: actual output was 9,100 cases,
and actual variable overhead was $395,000.

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