Requirements 1. Prepare a graph for fixed manufacturing overhead. The graph should display how Clean-It-Up, Inc.'s fixed manufacturing overhead costs will be depicted for the purposes of (a) planning and control and (b) inventory costing. 2. Suppose that 850,000 machine-hours were allowed for actual output produced in 2020, but 925,000 actual machine-hours were used. Actual manufacturing overhead was $7,862,500, variable, and $18,100,000, fixed. Compute (a) the variable manufacturing overhead spending and efficiency variances and (b) the fixed manufacturing overhead spending and production-volume variances. 3. What is the amount of the under- or overallocated variable manufacturing overhead and the under- or overallocated fixed manufacturing overhead? Why are the flexible-budget variance and the under- or overallocated overhead amount always the same for variable manufacturing overhead but rarely the same for fixed manufacturing overhead? 4. Suppose the denominator level was 750,000 rather than 1,000,000 machine-hours. What variances in requirement 2 would be affected? Recompute them.
Requirements 1. Prepare a graph for fixed manufacturing overhead. The graph should display how Clean-It-Up, Inc.'s fixed manufacturing overhead costs will be depicted for the purposes of (a) planning and control and (b) inventory costing. 2. Suppose that 850,000 machine-hours were allowed for actual output produced in 2020, but 925,000 actual machine-hours were used. Actual manufacturing overhead was $7,862,500, variable, and $18,100,000, fixed. Compute (a) the variable manufacturing overhead spending and efficiency variances and (b) the fixed manufacturing overhead spending and production-volume variances. 3. What is the amount of the under- or overallocated variable manufacturing overhead and the under- or overallocated fixed manufacturing overhead? Why are the flexible-budget variance and the under- or overallocated overhead amount always the same for variable manufacturing overhead but rarely the same for fixed manufacturing overhead? 4. Suppose the denominator level was 750,000 rather than 1,000,000 machine-hours. What variances in requirement 2 would be affected? Recompute them.
Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Chapter11: Linear Optimization Models
Section: Chapter Questions
Problem 10P: The management of Hartman Company is trying to determine the amount of each of two products to...
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Y2
Part 1
Clean−It−Up, Inc., is a manufacturer of vacuums and uses standard costing . Manufacturing overhead (both variable and fixed) is allocated to products on the basis of budgeted machine-hours. In
2020, budgeted fixed manufacturing overhead cost was$18,000,000. Budgeted variable manufacturing overhead was $8 per machine-hour. The denominator level was 1,000,000 machine-hours.
![Requirements
1. Prepare a graph for fixed manufacturing overhead. The graph should display how Clean -It-Up,
Inc.'s fixed manufacturing overhead costs will be depicted for the purposes of (a) planning and
control and (b) inventory costing.
2. Suppose that 850,000 machine-hours were allowed for actual output produced in 2020, but
925,000 actual machine-hours were used. Actual manufacturing overhead was $7,862,500,
variable, and $18,100,000, fixed. Compute (a) the variable manufacturing overhead spending and
efficiency variances and (b) the fixed manufacturing overhead spending and production-volume
variances.
3. What is the amount of the under- or overallocated variable manufacturing overhead and the
under- or overallocated fixed manufacturing overhead? Why are the flexible-budget variance and
the under- or overallocated overhead amount always the same for variable manufacturing
overhead but rarely the same for fixed manufacturing overhead?
4. Suppose the denominator level was 750,000 rather than 1,000,000 machine-hours. What
variances in requirement 2 would be affected? Recompute them.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa6c78ec2-1b46-4506-a9f9-8cfe1bdc8c77%2Fc57b836c-1b88-4e97-9668-829d85814152%2Fo9q41mk_processed.png&w=3840&q=75)
Transcribed Image Text:Requirements
1. Prepare a graph for fixed manufacturing overhead. The graph should display how Clean -It-Up,
Inc.'s fixed manufacturing overhead costs will be depicted for the purposes of (a) planning and
control and (b) inventory costing.
2. Suppose that 850,000 machine-hours were allowed for actual output produced in 2020, but
925,000 actual machine-hours were used. Actual manufacturing overhead was $7,862,500,
variable, and $18,100,000, fixed. Compute (a) the variable manufacturing overhead spending and
efficiency variances and (b) the fixed manufacturing overhead spending and production-volume
variances.
3. What is the amount of the under- or overallocated variable manufacturing overhead and the
under- or overallocated fixed manufacturing overhead? Why are the flexible-budget variance and
the under- or overallocated overhead amount always the same for variable manufacturing
overhead but rarely the same for fixed manufacturing overhead?
4. Suppose the denominator level was 750,000 rather than 1,000,000 machine-hours. What
variances in requirement 2 would be affected? Recompute them.
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