The Data Below Relate to a Product of AirWay Company

question 113

Essay

The data below relate to a product of AirWay Company.
$\begin{array}{lrr} \text {Standard costs: } &\\ \text { Labor(3 hours at \( \$ 15 \) per hour) } & \text { \( \$ 45 \) per unit}\\ \text { Variable overhead at \( \$ 8 \) per labor hour} & \text { 24 per unit}\\ \text { Budgeted fixed production costs } & \text { \( \$ 140,000 \) per years }\\ \text { Budgeted production for the year } & \text { 4,000 units }\\\end{array}$

$\begin{array}{lr}\text { Actual results: } & \\\text { Production } & 3,600 \text { Units } \\\text { Labor(10,360hours) } & \$ 160,580\\\text { Overhead incurred ( } \$ 142,700 \text { fixed) } & \$ 222,200\end{array}$

Required:
(Be sure to indicate whether the variances are favorable or unfavorable.)
a. What is the variable overhead efficiency variance?
b. What is the variable overhead price variance?
c. What is the fixed overhead budget variance?
d. What is the fixed production volume variance?

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Definitions:

Insider-Trading Scheming

Insider-trading scheming involves the illegal practice of trading a public company's stock or other securities based on material, non-public information about the company.

Computer Program

A set of instructions written in a programming language that is executed by a computer to perform a specific task.

Justifiable Use

Circumstances under the law where actions, such as the use of force, are legally permissible due to their necessity in preventing harm or achieving a legitimate purpose.

Felony

A serious crime usually punishable by imprisonment for more than one year or by death.