### Variable Manufacturing Overhead Variance Analysis**Introduction:**The Sourdough Bread Company specializes in baking baguettes for distribution to upscale grocery stores. The company's cost structure includes two primary direct-cost categories:1. **Direct Materials**2. **Direct Manufacturing Labor**Variable manufacturing overhead is allocated to products based on standard direct manufacturing labor hours.**Budget Data:**Below is some budget data for the Sourdough Bread Company:- **Direct Manufacturing Labor Use:** 0.02 hours per baguette- **Variable Manufacturing Overhead:** $10.00 per direct manufacturing labor-hour**Additional Data:**The Sourdough Bread Company provides the following additional data for the year ended December 31, 2021.---This concludes the provided budget data for an analysis of variable manufacturing overhead variance for the Sourdough Bread Company. Further sections would likely include analysis of these data points and their implications for the company's operations and financial performance. **Planned (budgeted) output:** 3,800,000 baguettes **Actual production:** 2,700,000 baguettes **Direct manufacturing labor:** 48,600 hours **Actual variable manufacturing overhead:** $631,800 **Requirements:**1. **What is the denominator level used for allocating variable manufacturing overhead?** *(That is, for how many direct manufacturing labor-hours is Sourdough Bread budgeting?)*2. **Prepare a variance analysis of variable manufacturing overhead.**3. **Discuss the variances you have calculated and give possible explanations for them.**

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Description: ### Variable Manufacturing Overhead Variance Analysis**Introduction:**The Sourdough Bread Company specializes in baking baguettes for distribution to upscale grocery stores. The company's cost structure includes two primary direct-cost categories:1.

Variance analysis of variable manufacturing overhead consists of variable overhead spending variance…

Business

Accounting

Planned (budgeted) output Actual production Direct manufacturing labor Actual variable manufacturing overhead $631,800 3,800,000 baguettes 2,700,000 baguettes 48,600 hours Requirements: 1). What is the denominator level used for allocating variable manufacturing overhead? (That is, for how many direct manufacturing labor-hours is Sourdough Bread budgeting?) 2). Prepare a variance analysis of variable manufacturing overhead. 3). Discuss the variances you have calculated and give possible explanations for them.

Planned (budgeted) output Actual production Direct manufacturing labor Actual variable manufacturing overhead $631,800 3,800,000 baguettes 2,700,000 baguettes 48,600 hours Requirements: 1). What is the denominator level used for allocating variable manufacturing overhead? (That is, for how many direct manufacturing labor-hours is Sourdough Bread budgeting?) 2). Prepare a variance analysis of variable manufacturing overhead. 3). Discuss the variances you have calculated and give possible explanations for them.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Variance Industries, Ltd. creates problems for accounting students. At the end of the first quarter of 2021, you have been asked to prepare a variance analysis of the company's operations for the quarter recently ended. You have gathered the data below from the company's accounts and the static budget prepared in December 2020. Variable and fixed manufacturing overhead are allocated based on direct- labour dollars. Units manufactured and sold Sales revenue Variable costs Direct materials Direct labour Variable manufacturing overhead Total variable costs Contribution margin Fixed manufacturing overhead Operating income (loss) Actual results Static budget 10,000 12,000 $320,000 $50,000 125,000 29,000 204,000 116,000 73,000 43,000 $360,000 $60,000 120,000 24,000 204,000 156,000 72,000 84,000
Calculate the labor efficiency variance: Labor costs: Budgeted costs (per unit) 2.25 hours at € 16.40 per hour based on 350 units. Actual: Units: 310 Hours: 620 Labor cost: € 10, 540 a. €1, 435 favourable b. € 1,271 favourable c. € 899 favourable d. €1, 435 adverse
Question 2 : a company produces chemicals for large biotech companies. It has the following data fo manufacturing overhead costs during August 2017 Variable $35,000 Fixed $16,500 Actual costs incurred Costs allocated to products Flexible budget Actual input x budgeted rate 36,000 15,200 16,000 31,500 Fill in the blanks. Use F for favorable and U for unfavorable: Variable Fixed (1) Spending variance (2) Efficiency variance (3) Production-volume variance (4) Flexible-budget variance (5) Underallocated (overallocated) manufacturing overhead
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The Illustrative Corporation recorded the following budgeted and actual information relating to fixed overhead costs for its Z-Line of products Standard fixed overhead per direct labor hour Standard direct labor hours per unit Budgeted production Budgeted fixed overhead costs $3 0.75 3,400 $7.650.00 Actual production in units Actual fixed overhead costs incurred What is Illustrative's fixed manufacturing overhead volume variance? A. $2.025.00 favorable OB. $4.950.00 favorable OC. $2,025.00 unfavorable D. $4.950.00 unfavorable 4,300 $2.700.00
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Please redo this problem and show me steps on how to get the following questions correct, its stating I am wrong. Please help Direct Labor Variances The following data relate to labor cost for production of 6,600 cellular telephones: Actual: 4,480 hrs. at $16.10 $72,128 Standard: 4,410 hrs. at $16.40 $72,324 a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter all values as a positive number and then identify the variance (e.g. Favorable or Unfavorable) in the adjacent column. Rate variance $ Favorable Time variance $ Unfavorable Total direct labor cost variance $ Favorable b. The employees may have been less-experienced or poorly trained, thereby resulting in a lower labor rate than planned. The lower level of experience or training may have resulted in less efficient performance. Thus, the actual time required was more than standard. LIz C
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