Question 2: (10 marks) (B1, C3) Ahlia Arts is a manufacturer of designer vases. The...
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Question 2: (10 marks) (B1, C3) Ahlia Arts is a manufacturer of designer vases. The cost of each vase is the sum of three variable costs (direct material costs, direct manufacturing labor costs, and manufacturing overhead costs) and one fixed-cost category (manufacturing overhead costs). Variable manufacturing overhead cost is allocated to each vase on the basis of budgeted direct manufacturing labor-hours per vase. For June 2017, each vase is budgeted to take 4 labor-hours. Budgeted variable manufacturing overhead cost per labor-hour is S14. The budgeted number of vases to be manufactured in June 2017 is 1,100. Actual variable manufacturing costs in June 2017 were $65,205 for 1,150 vases started and completed. There were no beginning inventories or ending inventories for the vases. Actual direct manufacturing labor-hours for June were 4,830. Instructions: 1. Compute the flexible-budget variance, the spending variance, and the efficiency variance for variable manufacturing overhead. 2. Comment on the results
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