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.