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Luxury Clothing is a manufacturer of designer suits. For June 2020, each suit is budgeted...

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Accounting

Luxury Clothing is a manufacturer of designer suits. For June 2020, each suit is budgeted to take 3 labor-hours. The budgeted numb 1,080. Luxury Clothing allocates fixed manufacturing overhead to each suit using budgeted direct manufacturing labor-hours per suit overhed costs for June 2020 are budgeted, $55,080, and actual, $63,915. In June 2020 there were 1,100 suits started and complet inventories of suits.
Requirements
Compute the spending variance for fixed manufacturing overhead. Comment on the results.
Compute the production-volume variance for June 2020. What inferences can Luxury Clothing draw from this variance?
Requirement 1. Compute the spending variance for fixed manufacturing overhead. Comment on the results.
Begin by computing the following amounts for the fixed manufacturing overhead.
\table[[,\table[[Same Budgeted],[Lump Sum],[Regardless of],[Output Level]],\table[[Flexible Budget:],[Same Budgeted],[Lump Sum],[Regardless of],[Output Level]],\table[[Allocated],[Overhead]],],[$,63,915$,55,080TT$,55,080 $ $,56,100]]
Now compute the spending variance. Label the variance as favorable (F) or unfavorable (U).
Spending variance
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