Ever-Sharp Lawnmowers Ltd

question 229

Essay

Ever-Sharp Lawnmowers Ltd. controls variable manufacturing overhead costs with assembly-line hours as the denominator. Fixed manufacturing overhead costs are applied on a unit-of-output basis. Each lawnmower is allowed 10 assembly-line hours and standard variable manufacturing overhead totals $650 per unit. Budgeted fixed manufacturing overhead totals $29,400 for 420 lawnmowers. During July 4,200 assembly-line hours were incurred and 400 lawnmowers were produced. Actual manufacturing overhead costs for July were $260,400 for variable expenses and $32,300 for fixed expenses.
Required: Calculate the variable manufacturing overhead spending and efficiency variances; and, the fixed manufacturing overhead budget and volume variances.

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Definitions:

Thoughts

Mental processes or ideas that occur in the mind, ranging from conscious reasoning to subconscious beliefs.

Conditioned Stimulus

A formerly neutral stimulus that, following its pairing with an unconditioned stimulus, ends up provoking a conditioned response.

Unconditioned Response

A natural, automatic reaction to a stimulus that occurs without prior learning or conditioning.

Conditioned Stimulus

A previously neutral stimulus that, after becoming associated with an unconditioned stimulus, is able to elicit a conditioned response on its own.