Homework Help is Here – Start Your Trial Now!
Business
Accounting
For May, Mariana company planned production of 14,400 units (80% of its production capacity of 18,000 units) and prepared the following overhead budget. The company applies overhead with a standard of 3 DLH per unit and a standard overhead rate of $3.79 per DLH. Overhead Budget 80% Operating Level Production (in units) 14,400 Budgeted overhead Variable overhead costs Indirect materials Indirect labor Power Maintenance $ 25,920 43,200 3,888 Total variable overhead costs 83,808 Fixed overhead costs Rent of building Depreciation Machinery Supervisory salaries Total fixed overhead costs Total overhead 10,800 Power Maintenance 27,000 18,000 34,920 $ 163,728 It actually operated at 90% capacity (16,200 units) in May and incurred the following actual overhead. Actual Overhead Costs Indirect materials Indirect labor 79,920 46,500 12,150 8,800 Rent of building 27,000 Depreciation Machinery 18,000 Supervisory salaries 38,000 Actual total overhead $ 176,370 $ 25,920 1. Compute the overhead controllable variance and identify it as favorable or unfavorable. 2. Compute the overhead volume variance and identify it as favorable or unfavorable. 3. Prepare an overhead variance report at the actual activity level of 16,200 unit

For May, Mariana company planned production of 14,400 units (80% of its production capacity of 18,000 units) and prepared the following overhead budget. The company applies overhead with a standard of 3 DLH per unit and a standard overhead rate of $3.79 per DLH. Overhead Budget 80% Operating Level Production (in units) 14,400 Budgeted overhead Variable overhead costs Indirect materials Indirect labor Power Maintenance $ 25,920 43,200 3,888 Total variable overhead costs 83,808 Fixed overhead costs Rent of building Depreciation Machinery Supervisory salaries Total fixed overhead costs Total overhead 10,800 Power Maintenance 27,000 18,000 34,920 $ 163,728 It actually operated at 90% capacity (16,200 units) in May and incurred the following actual overhead. Actual Overhead Costs Indirect materials Indirect labor 79,920 46,500 12,150 8,800 Rent of building 27,000 Depreciation Machinery 18,000 Supervisory salaries 38,000 Actual total overhead $ 176,370 $ 25,920 1. Compute the overhead controllable variance and identify it as favorable or unfavorable. 2. Compute the overhead volume variance and identify it as favorable or unfavorable. 3. Prepare an overhead variance report at the actual activity level of 16,200 unit

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Topic Video
Question
Please don't give image based answer..thanku
For May, Mariana company planned production of 14,400 units (80% of its production capacity of 18,000 units) and prepared the following overhead budget. The company applies overhead with a standard of 3 DLH per unit and a standard overhead rate of $3.79 per DLH. 80% Operating Level 14,400 Overhead Budget Production (in units) Budgeted overhead Variable overhead costs Indirect materials Indirect labor Power Maintenance Total variable overhead costs Fixed overhead costs Rent of building $ 25,920 Depreciation Machinery Supervisory salaries Total fixed overhead costs Total overhead 43,200 10,800 3,888 83,808 27,000 18,000 34,920 79,920 $ 163,728 It actually operated at 90% capacity (16,200 units) in May and incurred the following actual overhead. Actual Overhead Costs Indirect materials Indirect labor $ 25,920 46,500 Power Maintenance 8,800 Rent of building 27,000 Depreciation Machinery 18,000 Supervisory salaries 38,000 Actual total overhead $ 176,370 12,150 1. Compute the overhead controllable variance and identify it as favorable or unfavorable. 2. Compute the overhead volume variance and identify it as favorable or unfavorable. 3. Prepare an overhead variance report at the actual activity level of 16,200 unit
Transcribed Image Text:For May, Mariana company planned production of 14,400 units (80% of its production capacity of 18,000 units) and prepared the following overhead budget. The company applies overhead with a standard of 3 DLH per unit and a standard overhead rate of $3.79 per DLH. 80% Operating Level 14,400 Overhead Budget Production (in units) Budgeted overhead Variable overhead costs Indirect materials Indirect labor Power Maintenance Total variable overhead costs Fixed overhead costs Rent of building $ 25,920 Depreciation Machinery Supervisory salaries Total fixed overhead costs Total overhead 43,200 10,800 3,888 83,808 27,000 18,000 34,920 79,920 $ 163,728 It actually operated at 90% capacity (16,200 units) in May and incurred the following actual overhead. Actual Overhead Costs Indirect materials Indirect labor $ 25,920 46,500 Power Maintenance 8,800 Rent of building 27,000 Depreciation Machinery 18,000 Supervisory salaries 38,000 Actual total overhead $ 176,370 12,150 1. Compute the overhead controllable variance and identify it as favorable or unfavorable. 2. Compute the overhead volume variance and identify it as favorable or unfavorable. 3. Prepare an overhead variance report at the actual activity level of 16,200 unit
Required 1 Required 2 Required 3 Compute the overhead controllable variance and identify it as favorable or unfavorable. Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no variance. Controllable variance Actual total overhead Budgeted (flexible) overhead Fixed overhead Variable overhead Controllable variance Required 1 Required 2 Required 3 Volume variance Compute the overhead volume variance and identify it as favorable or unfavorable. Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no variance. Do not round intermediate calculations. Volume Variance Expected Actual Controllable Variance Variable overhead costs: Fixed overhead costs < Required 1 < Required 1 Total overhead costs Volume Variance Prepare an overhead variance report at the actual activity level of 16,200 units. Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance. Do not round intermediate calculations. Valume variance Total overhead vanance Required 3 > MARIANA COMPANY Overhead Variance Report For Month Ended May 31 Flexible Budget Required 2 > Actual Results Variances Favorable/Unfavorable
Transcribed Image Text:Required 1 Required 2 Required 3 Compute the overhead controllable variance and identify it as favorable or unfavorable. Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no variance. Controllable variance Actual total overhead Budgeted (flexible) overhead Fixed overhead Variable overhead Controllable variance Required 1 Required 2 Required 3 Volume variance Compute the overhead volume variance and identify it as favorable or unfavorable. Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no variance. Do not round intermediate calculations. Volume Variance Expected Actual Controllable Variance Variable overhead costs: Fixed overhead costs < Required 1 < Required 1 Total overhead costs Volume Variance Prepare an overhead variance report at the actual activity level of 16,200 units. Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance. Do not round intermediate calculations. Valume variance Total overhead vanance Required 3 > MARIANA COMPANY Overhead Variance Report For Month Ended May 31 Flexible Budget Required 2 > Actual Results Variances Favorable/Unfavorable
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Performance measurements
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS