Blue Corp. supplies its customers with high-quality canvas tents. These canvas tents sell for $170 each, with the following…

Blue Corp. supplies its customers with high-quality canvas tents. These canvas tents sell for $170 each, with the following…

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Blue Corp. supplies its customers with high-quality canvas tents. These canvas tents sell for $170 each, with the following…
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Blue Corp. supplies its customers with high-quality canvas tents. These canvas tents sell for $170 each, with the following DM and DL
usage and price expectations.
Direct materials
Direct labor
Variable-MOH
Fixed-MOH
(a)
9 square yards per unit
1.2 DL hours per unit
1.2 DL hours per unit
1.2 DL hours per unit
Throughout the year, Blue used 4,002 DL hours in the process of making 3,450 tents. The company had originally planned to produce
and sell 3,150 tents with budgeted fixed-MOH cost of $11.340. Its actual fixed-MOH costs amounted to $10,188 for the year.
Determine Blue’s fixed-MOH price and volume variances. Also identify whether the company’s fixed-MOH costs were under-or
overapplied, and by how much.
Fixed-MOH price variance
Fixed-MOH
$
Fixed-MOH volume variance $
@ $4/square yard
@ $12/DL hour
@ $2.00/DL hour
@ $3/DL hour
$

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