The following partial information is contained in the variance analysis received from the Western Plant of Eastlawn Company. All plants at Eastlawn apply overhead on the basis of direct labor-hours Flexible budget for variable overhead based on 3,640 direct labor-hours Actual total overhead incurred Actual direct labor-hours worked Direct labor-hours used to determined the fixed overhead application rate Price variance for variable overhead Price variance for fixed overhead Required: a. Prepare a variable overhead analysis. b. Prepare a fixed overhead analysis. $ 101,920 510,300 3,772 3,390 $ 7,150 F $ 11,814 U Complete this question by entering your answers in the tabs below. Required A Required B Prepare a fixed overhead analysis. Note: Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Price variance 11,814 บี Production volume variance F Fixed overhead total variance F
The following partial information is contained in the variance analysis received from the Western Plant of Eastlawn Company. All plants at Eastlawn apply overhead on the basis of direct labor-hours Flexible budget for variable overhead based on 3,640 direct labor-hours Actual total overhead incurred Actual direct labor-hours worked Direct labor-hours used to determined the fixed overhead application rate Price variance for variable overhead Price variance for fixed overhead Required: a. Prepare a variable overhead analysis. b. Prepare a fixed overhead analysis. $ 101,920 510,300 3,772 3,390 $ 7,150 F $ 11,814 U Complete this question by entering your answers in the tabs below. Required A Required B Prepare a fixed overhead analysis. Note: Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Price variance 11,814 บี Production volume variance F Fixed overhead total variance F
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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.
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The following partial information is contained in the variance analysis received from the Western Plant of Eastlawn Company. All plants at Eastlawn apply overhead on the basis of direct labor-hours
Flexible budget for variable overhead based on 3,640 direct labor-hours
Actual total overhead incurred
Actual direct labor-hours worked
Direct labor-hours used to determined the fixed overhead application rate
Price variance for variable overhead Price variance for fixed overhead
Required:
a. Prepare a variable overhead analysis.
b. Prepare a fixed overhead analysis.
$ 101,920
510,300
3,772
3,390
$ 7,150 F
$ 11,814 U
Complete this question by entering your answers in the tabs below.
Required A
Required B
Prepare a fixed overhead analysis.
Note: Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.
Price variance
11,814 บี
Production volume variance
F
Fixed overhead total variance
F
Transcribed Image Text:The following partial information is contained in the variance analysis received from the Western Plant of Eastlawn Company. All plants at Eastlawn apply overhead on the basis of direct labor-hours.
- **Flexible budget for variable overhead based on 3,640 direct labor-hours:** $101,920
- **Actual total overhead incurred:** $510,300
- **Actual direct labor-hours worked:** 3,772
- **Direct labor-hours used to determine the fixed overhead application rate:** 3,390
- **Price variance for variable overhead:** $7,150 F (Favorable)
- **Price variance for fixed overhead:** $11,814 U (Unfavorable)
**Required:**
a. Prepare a variable overhead analysis.
b. Prepare a fixed overhead analysis.
**Instructions:**
- Complete this question by entering your answers in the tabs below.
**Prepare a fixed overhead analysis.**
- Note: Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.
| Price variance | $11,814 | U |
|-------------------------------|---------|---|
| Production volume variance | | F |
| Fixed overhead total variance | | F |
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Step 1: Defining Variable overhead Variance
VIEWStep 2: Solution to Requirement a:
VIEWStep 3: Continuation to requirement a :
VIEWStep 4: Solution to requirement b:
VIEWStep 5: Calculating Budgeted Fixed overhead and Fixed overhead application rate :
VIEWStep 6: Calculating Fixed overhead production volume variance and Fixed overhead total variance
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