8- 17 Fixed manufacturing overhead, variance analysis ( continuation of 8- 16). Esquire Clothing allocates fixed manufacturing overhead to each suit using budgeted direct manufacturing labor- hours per suit. Data pertaining to fixed manufacturing overhead costs for June 2009 are budgeted, $ 62,400, and actual, $ 63,916.
1. Compute the spending variance for fixed manufacturing overhead. Comment on the results.
2. Compute the production- volume variance for June 2009. What inferences can Esquire Clothing draw from this variance?
8- 18 Variable manufacturing overhead variance analysis. The French Bread Company bakes baguettes for distribution to upscale grocery stores. The company has two direct- cost categories: direct materials and direct manufacturing labor. Variable manufacturing overhead is allocated to products on the basis of standard direct manufacturing labor- hours. Following is some budget data for the French Bread Company:
Direct manufacturing labor use 0.02 hours per baguette
Variable manufacturing overhead $ 10.00 per direct manufacturing labor- hour
The French Bread Company provides the following additional data for the year ended December 31, 2009:
Planned ( budgeted) output 3,200,000 baguettes
Actual production 2,800,000 baguettes
Direct manufacturing labor 50,400 hours
Actual variable manufacturing overhead $ 680,400
8- 19 Fixed manufacturing overhead variance analysis ( continuation of 8- 18). The French Bread Company also allocates fixed manufacturing overhead to products on the basis of standard direct manufac-turing labor- hours. For 2009, fixed manufacturing overhead was budgeted at $ 4.00 per direct manufacturing labor- hour. Actual fixed manufacturing overhead incurred during the year was $ 272,000.
1. Prepare a variance analysis of fixed manufacturing overhead cost. Use Exhibit 8- 4 ( p. 276) as a guide.
2. Is fixed overhead underallocated or overallocated? By what amount?
3. Comment on your results. Discuss the variances and explain what may be driving them.
8- 21 4- variance analysis, fill in the blanks. Pandom, Inc. produces chemicals for large biotech companies. It has the following data for manufacturing overhead costs during August 2010:
Actual costs incurred $35700 $18000
Costs allocated to products 27000 14400
Flexible budget: Budgeted input allowed for
actual output produced X budgeted rate 27000 15000
Actual input X budgeted rate 31500 15000
Use F for favorable and U for unfavorable:
(1) Spending variance $____ $____
(2) Efficiency variance ____ ____
(3) Production-volume variance ____ ____
(4) Flexible-budget variance ____ ____
(5) Underallocated (overallocated)
manufacturing overhead ____ ____
Cost accounting module 7.doc
The computations are shown for you. No detailed instructional comments so not for the novice.To continue with the answer check on mycoursewriter.com/
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