Joseph, Inc., provides the following results of June's operations:Direct materials price variance ………….. $ 400FDirect materials quantity variance ………. 2,000UDirect labor rate variance ……………….. 100UDirect labor efficiency variance ……….... 1,200FVariable overhead spending variance ……400UVariable overhead efficiency variance ….. 800FFixed overhead spending variance ……….100UFixed overhead volume variance ………... 600FRequired:(a) Determine the total overhead cost variance for June.(b) Applying the management by exception approach, which of the variances shown are of greatest concern? Why?
What will be an ideal response?
| (a) | Total overhead variance: | $400 U Variable overhead spending |
| ? | ? | 800 F Variable overhead efficiency |
| ? | ? | 100 U Fixed overhead spending |
| ? | ? | 600 F Fixed overhead volume |
| ? | ? | 900 F |
| (b) | Emphasis ought to be focused on: | ? |
| ? | Direct materials quantity ……………….. | $2,000 U |
| ? | Direct labor efficiency …………………. | 1,200 F |
| ? | Variable overhead efficiency …………… | 800 F |
| ? | From the data provided, these variances exhibit the greatest differences from the standard. |
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