Question:
Smart Touch sold 10,000 DVDs in June. Suppose Smart Touch had sold 7,000 DVDs instead of 10,000 and that actual costs were as follows:
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Direct materials (vinyl)
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7,400 square feet @ $2.00 per square foot
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Direct labor
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2,740 hours @ $10.00 per hour
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Variable overhead
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$5,400
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Fixed overhead
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$11,900
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Requirements
1. Given these new data, prepare an exhibit similar to. Ignore marketing and administrative expense.
2. Compute price and efficiency variances for direct materials, direct labor, and variable overhead. Compute the spending and volume variances for fixed overhead.