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For May, Mariana company planned production of 24,000 units (80% of its production capacity of 30,000 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 Production (in units) Budgeted overhead Variable overhead costs Indirect materials Indirect labor Power Maintenance Total variable overhead costs Fixed overhead costs Rent of building Depreciation Machinery Supervisory salaries Total fixed overhead costs Total overhead Indirect materials Indirect labor Power 80% Operating Level Maintenance Rent of building Depreciation Machinery Supervisory salaries Actual total overhead It actually operated at 90% capacity (27,000 units) in May and incurred the following actual overhead. Actual Overhead Costs $ 43,200 76,500 20,250 16,000 45,000 24,000 30,000 62,000 $ 292,950 $ 43,200 72,000 18,000 6,480 139,680 45,000 30,000 58,200 133,200 $ 272,880 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 27,000 units.

For May, Mariana company planned production of 24,000 units (80% of its production capacity of 30,000 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 Production (in units) Budgeted overhead Variable overhead costs Indirect materials Indirect labor Power Maintenance Total variable overhead costs Fixed overhead costs Rent of building Depreciation Machinery Supervisory salaries Total fixed overhead costs Total overhead Indirect materials Indirect labor Power 80% Operating Level Maintenance Rent of building Depreciation Machinery Supervisory salaries Actual total overhead It actually operated at 90% capacity (27,000 units) in May and incurred the following actual overhead. Actual Overhead Costs $ 43,200 76,500 20,250 16,000 45,000 24,000 30,000 62,000 $ 292,950 $ 43,200 72,000 18,000 6,480 139,680 45,000 30,000 58,200 133,200 $ 272,880 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 27,000 units.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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For May, Mariana company planned production of 24,000 units (80% of its production capacity of 30,000 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 Production (in units) Budgeted overhead Variable overhead costs Indirect materials Indirect labor Power Maintenance Total variable overhead costs Fixed overhead costs Rent of building Depreciation-Machinery Supervisory salaries Total fixed overhead costs Total overhead Actual Overhead Costs Indirect materials Indirect labor Power Maintenance Rent of building Depreciation-Machinery It actually operated at 90% capacity (27,000 units) in May and incurred the following actual overhead. Supervisory salaries. Actual total overhead 80% Operating Level $ 43,200 76,500 20,250 16,000 Actual total erhead Budgeted (flexible) overhead 45,000 30,000 62,000 $ 292,950 Controllable variance 24,000 $ 43,200 72,000 18,000 6,480 139,680 45,000 30,000 58, 200 133,200 $ 272,880 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 27,000 units. Complete this question by entering your answers in the tabs below. 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 < Required 1 Required 2 >
Transcribed Image Text:For May, Mariana company planned production of 24,000 units (80% of its production capacity of 30,000 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 Production (in units) Budgeted overhead Variable overhead costs Indirect materials Indirect labor Power Maintenance Total variable overhead costs Fixed overhead costs Rent of building Depreciation-Machinery Supervisory salaries Total fixed overhead costs Total overhead Actual Overhead Costs Indirect materials Indirect labor Power Maintenance Rent of building Depreciation-Machinery It actually operated at 90% capacity (27,000 units) in May and incurred the following actual overhead. Supervisory salaries. Actual total overhead 80% Operating Level $ 43,200 76,500 20,250 16,000 Actual total erhead Budgeted (flexible) overhead 45,000 30,000 62,000 $ 292,950 Controllable variance 24,000 $ 43,200 72,000 18,000 6,480 139,680 45,000 30,000 58, 200 133,200 $ 272,880 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 27,000 units. Complete this question by entering your answers in the tabs below. 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 < Required 1 Required 2 >
For May, Mariana company planned production of 24,000 units (80% of its production capacity of 30,000 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. Production (in units) Budgeted overhead Variable overhead costs Indirect materials Indirect labor Power Maintenance Total variable overhead costs Fixed overhead costs Rent of building Depreciation-Machinery Supervisory salaries Total fixed overhead costs Total overhead Overhead Budget Indirect materials Indirect labor Power Maintenance Rent of building Depreciation-Machinery Actual Overhead Costs Supervisory salaries Actual total overhead It actually operated at 90% capacity (27,000 units) in May and incurred the following actual overhead. Required 1 Volume variance Required 2 Required 3 Actual total overhead Required 1 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 27,000 units. Complete this question by entering your answers in the tabs below. Required 2 80% Operating Level 24,000 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. Expected Actual Controllable Variance Variable overhead costs: $ 43,200 76,500 Volume Variance Fixed overhead costs: 20,250 16,000 45,000 30,000 62,000 $292,950 Total overhead costs Volume Variance $ 43,200 72,000 Volume variance Total overhead variance 18,000 6,480 139,680 Required 3 45,000 30,000 58,200 133,200 $ 272,880 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 27,000 units. $ 292,950 Complete this question by entering your answers in the tabs below. < Required 1 Prepare an overhead variance report at the actual activity level of 27,000 units. Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance. Do not round intermediate calculations. Required 3 > MARIANA COMPANY Overhead Variance Report For Month Ended May 31 Flexible Budget Actual Results < Required 2 Variances Required 3 > Favorable/Unfavorable
Transcribed Image Text:For May, Mariana company planned production of 24,000 units (80% of its production capacity of 30,000 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. Production (in units) Budgeted overhead Variable overhead costs Indirect materials Indirect labor Power Maintenance Total variable overhead costs Fixed overhead costs Rent of building Depreciation-Machinery Supervisory salaries Total fixed overhead costs Total overhead Overhead Budget Indirect materials Indirect labor Power Maintenance Rent of building Depreciation-Machinery Actual Overhead Costs Supervisory salaries Actual total overhead It actually operated at 90% capacity (27,000 units) in May and incurred the following actual overhead. Required 1 Volume variance Required 2 Required 3 Actual total overhead Required 1 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 27,000 units. Complete this question by entering your answers in the tabs below. Required 2 80% Operating Level 24,000 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. Expected Actual Controllable Variance Variable overhead costs: $ 43,200 76,500 Volume Variance Fixed overhead costs: 20,250 16,000 45,000 30,000 62,000 $292,950 Total overhead costs Volume Variance $ 43,200 72,000 Volume variance Total overhead variance 18,000 6,480 139,680 Required 3 45,000 30,000 58,200 133,200 $ 272,880 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 27,000 units. $ 292,950 Complete this question by entering your answers in the tabs below. < Required 1 Prepare an overhead variance report at the actual activity level of 27,000 units. Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance. Do not round intermediate calculations. Required 3 > MARIANA COMPANY Overhead Variance Report For Month Ended May 31 Flexible Budget Actual Results < Required 2 Variances Required 3 > Favorable/Unfavorable
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