Manuel Company predicts it will operate at 80% of its productive capacity. Its overhead allocation base is DLH and its standard amount per allocation base is 0.5 DLH per unit. The company reports the following for this period. Production (in units) Overhead Variable overhead Fixed overhead Total overhead Flexible Budget at 80% Capacity 54,000 $ 297,000 54,000 $ 351,000 Actual Results 50,400 $ 357,800 (1) Compute the overhead volume variance. Indicate variance as favorable or unfavorable. (2) Compute the overhead controllable variance. Indicate variance as favorable or unfavorable.
Manuel Company predicts it will operate at 80% of its productive capacity. Its overhead allocation base is DLH and its standard amount per allocation base is 0.5 DLH per unit. The company reports the following for this period. Production (in units) Overhead Variable overhead Fixed overhead Total overhead Flexible Budget at 80% Capacity 54,000 $ 297,000 54,000 $ 351,000 Actual Results 50,400 $ 357,800 (1) Compute the overhead volume variance. Indicate variance as favorable or unfavorable. (2) Compute the overhead controllable variance. Indicate variance as favorable or unfavorable.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
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.
Topic Video
Question
Please do not give solution in image format thanku
![Requirea information
[The following information applies to the questions displayed below.]
Manuel Company predicts it will operate at 80% of its productive capacity.
Its overhead allocation base is DLH and its standard amount per allocation
base is 0.5 DLH per unit. The company reports the following for this period.
Production (in units)
Overhead
Variable overhead
Fixed overhead
Total overhead
Required 1
Required 2
(1) Compute the overhead volume variance. Indicate variance as favorable or unfavorable.
(2) Compute the overhead controllable variance. Indicate variance as favorable or
unfavorable.
Flexible Budget at
80% Capacity
54,000
Complete this question by entering your answers in the tabs below.
Standard overhead applied
Budgeted (flexible) overhead
Volume variance
Required 1 Required 2
$ 297,000
54,000
$351,000
Compute the overhead volume variance. Indicate variance as favorable or unfavorable.
Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no variance.
Actual total overhead
Budgeted (flexible) overhead
Controllable variance
Actual
Results
50,400
Volume Variance
$ 357,800
$ 327,600
Compute the overhead controllable variance. Indicate variance as favorable or unfavorable.
Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no variance.
Controllable variance](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe15b8af0-27e1-4c12-b293-7f8d2f41b828%2F5979d199-eb69-48a8-8f9e-6ffd1e0ebd4d%2F2q86yv_processed.png&w=3840&q=75)
Transcribed Image Text:Requirea information
[The following information applies to the questions displayed below.]
Manuel Company predicts it will operate at 80% of its productive capacity.
Its overhead allocation base is DLH and its standard amount per allocation
base is 0.5 DLH per unit. The company reports the following for this period.
Production (in units)
Overhead
Variable overhead
Fixed overhead
Total overhead
Required 1
Required 2
(1) Compute the overhead volume variance. Indicate variance as favorable or unfavorable.
(2) Compute the overhead controllable variance. Indicate variance as favorable or
unfavorable.
Flexible Budget at
80% Capacity
54,000
Complete this question by entering your answers in the tabs below.
Standard overhead applied
Budgeted (flexible) overhead
Volume variance
Required 1 Required 2
$ 297,000
54,000
$351,000
Compute the overhead volume variance. Indicate variance as favorable or unfavorable.
Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no variance.
Actual total overhead
Budgeted (flexible) overhead
Controllable variance
Actual
Results
50,400
Volume Variance
$ 357,800
$ 327,600
Compute the overhead controllable variance. Indicate variance as favorable or unfavorable.
Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no variance.
Controllable variance
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 7 steps with 1 images
Knowledge Booster
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
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education