Abrams, Inc Required:
A

question 13

Essay

Abrams, Inc.provides the following results of March's operations:
$$\begin{array} { l r } \text { Direct materials price variance } & \$ 400 F \\\text { Direct materials quartity variance } & 2,000 \mathrm { U } \\\text { Direct labor rate variance } & 100 \mathrm { U } \\\text { Direct labor efficiency variance } & 1,200 \mathrm {F} \\\text { Variable overhead spendirg variance } & 400 \mathrm {U} \\\text { Variable overhead efficiency variance } & 800 \mathrm {F} \\\text { Fixed overhead spending variance } & 100 \mathrm {U} \\\text { Fixed overhead yolume yariance } & 600 \mathrm {F}\end{array}$$ Required:
a.Determine the total overhead cost variance for March.
b.Applying the management by exception approach, which of the variances shown are of greatest concern? Why?
c.Assuming the variances are immaterial and we close them to Cost of Goods Sold, what will the effect be on that account of these variances?

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Definitions:

Charge Differential

The difference in electric charge between two points, which can drive a current or induce movement of charges towards equalization.

Capacitor

Electrical charge storage device. Also known as a condenser.

Step-Up Transformer

A transformer that induces a higher voltage in its secondary coil by using a larger number of windings than in the primary coil.

Ignition Coil

A component of the ignition system in vehicles that transforms low voltage into the high voltage required to spark the spark plugs.