At the Beginning of the Year,Goodman Company Had the Following

question 90

Essay

At the beginning of the year,Goodman Company had the following standard cost sheet for one of its food products: $$\begin{array} { l r } \text { Direct materials (10 kg } @ 3.20 \text { per kilogram) } & \$ 32.00 \\\text { Direct labour (4 hours } @ \$ 9.00 \text { per hour) } & 36.00 \\\text { Fixed overhead (4 hours } @ \$ 4.00 \text { per hour) } & 16.00 \\\text { Variable overhead (4 hours } @ , \$ 0.75 \text { per hour) } & 3.00 \\\text { Standard cost per unit } & \$ 87.00\end{array}$$ Goodman computes its overhead rates using practical volume,which is 72,000 units.The actual results for the year are: $$\begin{array} { l r } \text { Units produced } & 70,000 \\\text { Direct labour hours } & 290,000 \\\text { Actual wage per hour } & \$ 9.05 \\\text { Fixed overhead } & \$ 1,160,000 \\\text { Variable overhead } & \$ 218,000\end{array}$$ A. Compute the fixed overhead spending and volume vari ances.
B. Compute the variable overhead spending and efficiency variances.

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds, representing the price paid for the use of a lender's money or credit.

Ordinary Shares

Equity shares that represent ownership in a company and give the holder voting rights and a share in the company’s profits through dividends.

Dividends Distributed

Payments made by a corporation to its shareholders, usually derived from the company's earnings.

AASB 9

The Australian Accounting Standards Board standard on Financial Instruments, outlining the requirements for recognizing and measuring financial assets and liabilities.