Crane Company manufactures deep-sea fishing rods, which it distributes internationally through a chain of wholesalers....
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Accounting
Crane Company manufactures deep-sea fishing rods, which it distributes internationally through a chain of wholesalers. The following data are taken from the budget prepared at the beginning of the year by Cranes controller. The company applies overhead on the basis of machine hours.
Annual Budget
May Budget
Variable manufacturing overhead
$3,373,500
$305,500
Fixed manufacturing overhead
$1,203,600
$100,300
Direct labor hours
53,880
4,490
Machine hours
259,500
23,500
During the month of May, Crane used 4,280 direct labor hours and 21,930 machine hours. The flexible budget for the month allowed 4,420 direct labor hours and 21,000 machine hours. Actual fixed manufacturing overhead incurred was $103,300; variable manufacturing overhead incurred was $283,490.
(a) Calculate the variable overhead spending and efficiency variances for May. (Round per unit value to 2 decimal places, e.g. 52.75 and final answers to 0 decimal places, e.g. 5,725. If variance is zero, select "Not Applicable" and enter 0 for the amounts.)
Variable overhead spending variance
$_____________ Favorable
Variable overhead efficiency variance
$______________ Unfavorable
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