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Gantt Textiles Inc

question 64

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Gantt Textiles Inc.incurred actual variable overhead expenses of $50 000 in the current year for the production of 6000 units.Variable overhead was applied at a rate of $3.25 per direct labour hour and 2 direct labour hours were budgeted for each unit.The company used 16 000 direct labour hours for production.
Required: Compute each of the following variances.Indicate whether the variance is favourable (F)or unfavourable (U).
A. Variable cverhead 5pencing variance
B. Variable averhead efficiency variance


Definitions:

NPV Zero

A situation where the net present value of a project or investment is zero, indicating that the projected earnings are exactly equal to the initial investment.

Required Return

The minimum expected return an investor demands for investing in a non-risk-free asset.

Hacksaw Blade

A replaceable, toothed strip used in a hacksaw for cutting materials such as metal and plastic.

Adjustable Wrench

A wrench with one fixed and one movable jaw, enabling it to span a wide range of dimensions. The position of the movable jaw is determined by rotating a helical adjusting worm.

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