The following data are the actual results for Marvelous Marshmallow Company for August: Actual output 8,000 cases
Actual variable overhead $ 427,000
Actual fixed overhead $ 149,000
Actual machine time 33,400 machine hours
Standard cost and budget information for Marvelous Marshmallow Company follows:
Standard variable-overhead rate $ 12.00 per machine hour
Standard quantity of machine hours 4 hours per case of marshmallows
Budgeted fixed overhead $ 144,000 per month
Budgeted output 12,000 cases per month
Required:
Compute the following variances:
a Variable-overhead spending variance
b. Variable-overhead efficiencv variance
c. Fixed-overhead budget variance
d. Fixed-overhead volume variance

a. $26,200 Unfavorable

b. $16,800 Unfavorable

c. $ 5,000 Unfavorable

d. $48,000 Unfavorable

Explanation:

a Variable-overhead spending variance

Variable-overhead spending variance = Budgeted Variable overheads at actual hours worked - Actual variable overheads

                                                                = (33,400 × $ 12.00) - $ 427,000

                                                                = $400,800 - $ 427,000

                                                                = $26,200 Unfavorable

b. Variable-overhead efficiency variance

Variable-overhead efficiency variance = (Actual Output × Standard hour × Standard rate) - (Actual hours × Standard rate per hour)

                                                                = (8,000 × 4 × $ 12.00) - (33,400 × $ 12.00)

                                                                = $384,000 - $400,800

                                                                =  $16,800 Unfavorable

c. Fixed-overhead budget variance  

Fixed-overhead budget variance  = Actual Fixed Overheads - Budgeted Fixed Overheads

                                                       = $ 149,000 - $ 144,000

                                                       = $ 5,000 Unfavorable

d. Fixed-overhead volume variance

Fixed-overhead volume variance = Fixed overheads at Budgeted Production - Budgeted Fixed Overheads

                                                       = ($ 144,000 / 12,000 × 8,000) - $ 144,000

                                                       = $96,000 - $144,000

                                                       = $48,000 Unfavorable

answer/// real gdp decreases to y3 and the price level falls to p3;