Paul Manufacturers has adopted the following standards: Paul's January budget was based on normal volume of 100,000 standard labor hours.During January,Paul produced 26,000 units with records indicating the following data: Assuming Paul uses the three-variance method of analyzing factory overhead,compute the following variances for the month of January and indicate whether each is favorable or unfavorable:
a.Factory overhead spending variance
b.Factory overhead production-volume variance
c.Factory overhead efficiency variance

Question

Paul Manufacturers has adopted the following standards:  Paul's January budget was based on normal volume of 100,000 standard labor hours.During January,Paul produced 26,000 units with records indicating the following data:  Assuming Paul uses the three-variance method of analyzing factory overhead,compute the following variances for the month of January and indicate whether each is favorable or unfavorable: 
a.Factory overhead spending variance
b.Factory overhead production-volume variance
c.Factory overhead efficiency variance

Quizplus · Accepted Answer

The Answer of Paul Manufacturers has adopted the following standards:  Paul's January budget was based on normal volume of 100,000 standard labor hours.During January,Paul produced 26,000 units with records indicating the following data:  Assuming Paul uses the three-variance method of analyzing factory overhead,compute the following variances for the month of January and indicate whether each is favorable or unfavorable: 
a.Factory overhead spending variance
b.Factory overhead production-volume variance
c.Factory overhead efficiency variance

Paul Manufacturers Has Adopted the Following Standards: Paul's January