Jake's Cheese Company Produces Gourmet Cheese for Resale at Local

question 12

Essay

Jake's cheese Company produces gourmet cheese for resale at local grocery stores.Jake's expected to use 0.50 direct labor hours to produce one unit (batch)of product,and the variable overhead rate is $5.00 per hour.Actual results are in for last year,which indicates 45,000 batches of cheese were produced and sold.The company's direct labor workforce worked 27,500 hours,and variable overhead costs totaled $144,000.
(1)Calculate the variable overhead spending variance.
(2)Calculate the variable overhead efficiency variance.
(3)Suggest several possible reasons for the variable overhead spending and efficiency variances.

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Definitions:

Conglomerate Merger

A conglomerate merger is a combination of two companies that operate in unrelated business activities, aiming to expand corporate reach and reduce risks.

Strategic Merger

The combination of two companies with the aim of achieving long-term strategic goals and enhancing value.

Consolidation Merger

The combination of two or more companies into a completely new entity, with the original companies ceasing to exist.

Congeneric Merger

A type of merger between companies in related industries or sectors, aimed at diversification or enhancing competitive strengths.