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:

Approach-approach

A conflict situation in which an individual must choose between two desirable outcomes, often leading to decision-making stress.

Avoidance-avoidance

A situation in which a person faces a decision between two unfavorable or undesirable options, leading to conflict and stress.

Approach-avoidance

A psychological conflict that occurs when a person is simultaneously drawn to and repelled by the same object, event, or action.

Social Readjustment Rating Scale

A scale that measures the amount of stress in a person's life resulting from major life changes or adjustments.