Blaze Corporation allocates overhead on the basis of DLH and the standard amount per allocation base is 2.00 DLH per unit. For March, the company planned production of 10,000 units (80% of its production capacity of 12,500 units) and prepared the following budget. The company actually operated at 90% capacity (11.250 units) In March and Incurred actual total overhead costs of $127,395. Overhead Budget Production in units Budgeted variable overhead Budgeted fixed overhead 1. Compute the standard overhead rate. Hint Standard allocation base at 80% capacity is 20,000 DLH, computed as 10,000 units * 2.00 DLH per unit. 2. Compute the total overhead varlance. 3. Compute the overhead controllable variance. 4. Compute the overhead volume variance. 80% Operating Levels 10,000 $ 56,000 $ 66,000 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Budgeted flexible overhead Fixed overhead Volume variance Answer is complete but not entirely correct. Compute the overhead volume variance. Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no variance. Do not round intermediate calculations. X Volume Variance S $ Required 4 74,250 X 88,000 X 8,250 Favorable
Blaze Corporation allocates overhead on the basis of DLH and the standard amount per allocation base is 2.00 DLH per unit. For March, the company planned production of 10,000 units (80% of its production capacity of 12,500 units) and prepared the following budget. The company actually operated at 90% capacity (11.250 units) In March and Incurred actual total overhead costs of $127,395. Overhead Budget Production in units Budgeted variable overhead Budgeted fixed overhead 1. Compute the standard overhead rate. Hint Standard allocation base at 80% capacity is 20,000 DLH, computed as 10,000 units * 2.00 DLH per unit. 2. Compute the total overhead varlance. 3. Compute the overhead controllable variance. 4. Compute the overhead volume variance. 80% Operating Levels 10,000 $ 56,000 $ 66,000 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Budgeted flexible overhead Fixed overhead Volume variance Answer is complete but not entirely correct. Compute the overhead volume variance. Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no variance. Do not round intermediate calculations. X Volume Variance S $ Required 4 74,250 X 88,000 X 8,250 Favorable
Chapter1: Financial Statements And Business Decisions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Blaze Corporation allocates overhead on the basis of DLH and the standard amount per allocation base is 2.00 DLH per unit. For
March, the company planned production of 10,000 units (80% of its production capacity of 12,500 units) and prepared the following
budget. The company actually operated at 90% capacity (11.250 units) In March and Incurred actual total overhead costs of $127,395.
Overhead Budget
Production in units
Budgeted variable overhead
Budgeted fixed overhead
1. Compute the standard overhead rate. Hint Standard allocation base at 80% capacity is 20,000 DLH, computed as 10,000 units x
2.00 DLH per unit.
2. Compute the total overhead varlance.
3. Compute the overhead controllable variance.
4. Compute the overhead volume variance.
80% Operating
Levels
Required 1 Required 2 Required 3
Complete this question by entering your answers in the tabs below.
Budgeted flexible overhead
Fixed overhead
Volume variance
10,000
$ 56,000
$ 66,000
X
Answer is complete but not entirely correct.
Compute the overhead volume variance.
Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no variance. Do not round intermediate
calculations.
Volume Variance
S
Required 4
74,250 x
68,000 x
8,250✔ Favorable
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