Benjamin Inc

question 3

Essay

Benjamin Inc. uses a standard cost system and has the following information regarding the labor and overhead used in the production of widgets. Standard labor input is 2 hours per unit. The variable overhead rate is $8 per hour; fixed overhead is budgeted to be $100,000 on budgeted production of 8,000 widgets. During August, Benjamin Inc. paid its workers $161,670 for 16,800 hours. Actual variable overhead incurred totaled $133,560, actual fixed overhead totaled $98,956. Benjamin Inc. produced 8,600 widgets during August. Calculate the:
a. variable overhead rate variance.
b. variable overhead efficiency variance.
c. fixed overhead spending variance.

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Definitions:

Market Decline

A decrease in stock prices or the value of a particular market segment, often signaling a period of investor pessimism or economic downturn.

FOB Shipping Point

A shipping term indicating that the buyer takes ownership of goods being shipped the moment they leave the seller's premises and is responsible for shipping costs and risk of loss.

Consignment

A sales arrangement in which goods are left with a third-party to sell, but ownership remains with the supplier until the items are sold.

Inventory Errors

Mistakes made in counting or valuing inventory that can affect financial statements, including profit, loss, and tax liabilities.