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Cost Management 6th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins
Edition 6ISBN: 978-0078025532Cost Management 6th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins
Edition 6ISBN: 978-0078025532 Exercise 2
Graphical Analysis-Fixed Overhead Variances (Continuance of 15-40) The controller is satisfied with the graphical representation you prepared in conjunction with 15-40. She thinks this graphical representation of variable overhead variances will be well received by operating managers of the company. As such, she asks you to prepare an accompanying graph for fixed overhead variances. She indicates that you should assume the following in constructing your graph: (1) fixed overhead is applied to production on the basis of standard machine hours allowed for the output of the period (the standard total overhead cost per machine hour is $10, while the standard variable overhead cost per machine hour is $6); (2) during the example case, there was a favorable production-volume variance and an unfavorable spending (budget) variance for fixed overhead. Based on these assumptions, the controller has asked you to complete the following graph.
Required
1. (A) =
2. (B) =
3. (C) =
4. (D) =
5. (E) =
6. (F) =
7. (G) =
8. (H) =
9. (I) =
10. Vertical distance (J) =
11. Vertical distance (K) =
12. Vertical distance (L) =
Required
1. (A) =
2. (B) =
3. (C) =
4. (D) =
5. (E) =
6. (F) =
7. (G) =
8. (H) =
9. (I) =
10. Vertical distance (J) =
11. Vertical distance (K) =
12. Vertical distance (L) =
Explanation
Verified
Verified
Cost Variance and Capacity Management:
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Cost Management 6th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins
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