[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 Flexible Budget at 80% Capacity 53,000 Standard overhead rate Standard overhead applied Overhead variance $ 291,500 53,000 $ 344,500 Actual Results 48,800 $ 344,600 Compute the standard overhead rate. Hint: Standard allocation base at 80% capacity is 26,500 DLH, computed as 53,000 units * 0.5 DLH per unit. -Compute the standard overhead applied. *Compute the total overhead variance. (Indicate the effect of the variance by selecting favorable, unfavorable, or no variance.)
[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 Flexible Budget at 80% Capacity 53,000 Standard overhead rate Standard overhead applied Overhead variance $ 291,500 53,000 $ 344,500 Actual Results 48,800 $ 344,600 Compute the standard overhead rate. Hint: Standard allocation base at 80% capacity is 26,500 DLH, computed as 53,000 units * 0.5 DLH per unit. -Compute the standard overhead applied. *Compute the total overhead variance. (Indicate the effect of the variance by selecting favorable, unfavorable, or no variance.)
Chapter1: Financial Statements And Business Decisions
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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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![[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
Standard overhead rate
Standard overhead applied
Overhead variance
Flexible Budget at 80%
Capacity
53,000
10 Compute the standard overhead rate. Hint: Standard allocation base at 80% capacity is 26,500 DLH, computed as 53,000 units *
0.5 DLH per unit.
Compute the standard overhead applied.
*Compute the total overhead variance. (Indicate the effect of the variance by selecting favorable, unfavorable, or no variance.)
Volume variance
$ 291,500
53,000
$ 344,500
co
Complete this question by entering your answers in the tabs below.
Compute the overhead volume variance. Indicate variance as favorable or unfavorable. (Indicate the effect of the variance by
selecting favorable, unfavorable, or no variance.)
Actual
Results
48,800
$ 344,600
Volume Variance
Overhead controllable variance
Complete this question by entering your answers in the tabs below.
Overhead Controllable Variance
Compute the overhead controllable variance. Indicate variance as favorable or unfavorable. (Indicate the effect of the
variance by selecting favorable, unfavorable, or no variance.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F43dc20aa-3f46-4b3b-a05b-7bab1ba305a6%2F829dc072-da3d-4b75-8f48-600159fbeb1e%2Fdp72wyn_processed.jpeg&w=3840&q=75)
Transcribed Image Text:[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
Standard overhead rate
Standard overhead applied
Overhead variance
Flexible Budget at 80%
Capacity
53,000
10 Compute the standard overhead rate. Hint: Standard allocation base at 80% capacity is 26,500 DLH, computed as 53,000 units *
0.5 DLH per unit.
Compute the standard overhead applied.
*Compute the total overhead variance. (Indicate the effect of the variance by selecting favorable, unfavorable, or no variance.)
Volume variance
$ 291,500
53,000
$ 344,500
co
Complete this question by entering your answers in the tabs below.
Compute the overhead volume variance. Indicate variance as favorable or unfavorable. (Indicate the effect of the variance by
selecting favorable, unfavorable, or no variance.)
Actual
Results
48,800
$ 344,600
Volume Variance
Overhead controllable variance
Complete this question by entering your answers in the tabs below.
Overhead Controllable Variance
Compute the overhead controllable variance. Indicate variance as favorable or unfavorable. (Indicate the effect of the
variance by selecting favorable, unfavorable, or no variance.)
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