Home Insert Page Layout Formulas Data Review Static Budget 13,000 Actual Meals Made Easy (May 2017) Results 2 Output units (number of deliveries) 3 Hours per delivery 4 Hours of delivery time 5 Variable overhead cost per hour of delivery time 6 Variable overhead costs 7 Fixed overhead costs 8,750 0.70 5,600 $1.60 $10,640 $39,200 $36,400 1. Compute spending and efficiency variances for MME's variable overhead in May 2017. 2. Compute the spending variance and production-volume variance for MME's fixed overhead in May 2017. 3. Comment on MME's overhead variances and suggest how Thomas Stewart might manage MME's vari- able overhead differently from its fixed overhead costs. Required

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Overhead variances, service sector. Meals Made Easy (MME) operates a meal home-delivery service. It has agreements with 20 restaurants to pick up and deliver meals to customers who place orders on MME’s website. MME allocates variable and xed overhead costs on the basis of delivery time. MME’s owner, Thomas Stewart, obtains the following information for May 2017 overhead costs:

Home
Insert
Page Layout
Formulas
Data
Review
Static
Budget
13,000
Actual
Meals Made Easy (May 2017)
Results
2 Output units (number of deliveries)
3 Hours per delivery
4 Hours of delivery time
5 Variable overhead cost per hour of delivery time
6 Variable overhead costs
7 Fixed overhead costs
8,750
0.70
5,600
$1.60
$10,640
$39,200
$36,400
1. Compute spending and efficiency variances for MME's variable overhead in May 2017.
2. Compute the spending variance and production-volume variance for MME's fixed overhead in
May 2017.
3. Comment on MME's overhead variances and suggest how Thomas Stewart might manage MME's vari-
able overhead differently from its fixed overhead costs.
Required
Transcribed Image Text:Home Insert Page Layout Formulas Data Review Static Budget 13,000 Actual Meals Made Easy (May 2017) Results 2 Output units (number of deliveries) 3 Hours per delivery 4 Hours of delivery time 5 Variable overhead cost per hour of delivery time 6 Variable overhead costs 7 Fixed overhead costs 8,750 0.70 5,600 $1.60 $10,640 $39,200 $36,400 1. Compute spending and efficiency variances for MME's variable overhead in May 2017. 2. Compute the spending variance and production-volume variance for MME's fixed overhead in May 2017. 3. Comment on MME's overhead variances and suggest how Thomas Stewart might manage MME's vari- able overhead differently from its fixed overhead costs. Required
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