variable manufacturing overhead variance analysis esquire clot 362637

Variable manufacturing overhead, variance analysis. Esquire Clothing is a manufacturer of designer suits. The cost of each suit is the sum of three variable costs (direct material costs, direct manufacturing labor costs, and manufacturing overhead costs) and one fixed cost category (manufacturing over head costs). Variable manufacturing overhead cost is allocated to each suit on the basis of budgeted direct manufacturing labor hours per suit. For June 2009, each suit is budgeted to take four labor hours. Budgeted variable manufacturing overhead cost per labor hour is $12….The budgeted number of suits to be manufactured in June 2009 is 1,040.

Actual variable manufacturing costs in June 2009 were $52,164 for 1,080 suits started and completed. There were no beginning or ending inventories of suits. Actual direct manufacturing labor hours for June were 4,536.

1. Compute the flexible budget variance, the spending variance, and the efficiency variance for variable manufacturing overhead.

2. Comment on the results.