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 54,750 Required 1 Required 2 $ 301,125 54,750 $ 355,875 Volume variance Actual Results (1) Compute the overhead volume variance. Indicate variance as favorable or unfavorable. (2) Compute the overhead controllable variance. Indicate variance as favorable or unfavorable. 51,600 Complete this question by entering your answers in the tabs below. Volume Variance $367,700 Compute the overhead volume variance. Indicate variance as favorable or unfavorable. (Indicate the effect of the variance by selecting favorable, unfavorable, or no variance.)
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 54,750 Required 1 Required 2 $ 301,125 54,750 $ 355,875 Volume variance Actual Results (1) Compute the overhead volume variance. Indicate variance as favorable or unfavorable. (2) Compute the overhead controllable variance. Indicate variance as favorable or unfavorable. 51,600 Complete this question by entering your answers in the tabs below. Volume Variance $367,700 Compute the overhead volume variance. Indicate variance as favorable or unfavorable. (Indicate the effect of the variance by selecting favorable, unfavorable, or no variance.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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: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
54,750
$ 301,125
54,750
$ 355,875
Volume variance
Actual
Results
51,600
(1) Compute the overhead volume variance. Indicate variance as favorable or unfavorable.
(2) Compute the overhead controllable variance. Indicate variance as favorable or unfavorable.
Volume Variance
$367,700
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Compute the overhead volume variance. Indicate variance as favorable or unfavorable. (Indicate the effect of the variance by
selecting favorable, unfavorable, or no variance.)
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