### Fixed Manufacturing Overhead Variance Analysis (Continuation of #2 above)**Introduction:**The Sourdough Bread Company bakes baguettes for distribution to upscale grocery stores. The company has two direct-cost categories: direct materials and direct manufacturing labor. **Variable Manufacturing Overhead:**Variable manufacturing overhead is allocated to products on the basis of standard direct manufacturing labor-hours. The following budget data is provided for the Sourdough Bread Company:- **Direct manufacturing labor use:** 0.02 hours per baguette- **Variable manufacturing overhead:** $10.00 per direct manufacturing labor-hour**Fixed Manufacturing Overhead:**Additionally, the company allocates fixed manufacturing overhead to products on the basis of standard direct manufacturing labor-hours. - For 2021, fixed manufacturing overhead was budgeted at $3.00 per direct manufacturing labor-hour.- Actual fixed manufacturing overhead incurred during the year was $284,000.**Additional Data for the Year Ended December 31, 2021:**- **Planned (budgeted) output:** 3,600,000 baguettes- **Actual production:** 2,900,000 baguettes- **Direct manufacturing labor:** 52,600 hours- **Actual variable manufacturing overhead:** $678,540### Tasks:1. **Prepare a variance analysis of fixed manufacturing overhead cost:** - **Budgeted fixed manufacturing overhead:** (3,600,000 baguettes × 0.02 hours/baguette) × $3.00/hour = $216,000. - **Actual fixed manufacturing overhead:** $284,000 Fixed Manufacturing Overhead Variance = Actual Fixed Overhead - Budgeted Fixed Overhead = $284,000 - $216,000 = $68,000 (unfavorable)2. **Is fixed overhead under-allocated or over-allocated? By what amount?** Fixed overhead is over-allocated by $68,000.3. **Comment on your results. Discuss the variances and explain what may be driving them:** - The unfavorable fixed manufacturing overhead variance of $68,000 indicates that the actual fixed costs exceeded the budgeted costs by the same amount. - Possible reasons for this variance may include higher-than-expected expenses in fixed cost items such as rent, salaries of permanent staff, insurance, or other overheads that are not directly variable with production levels. -

Name: ### Fixed Manufacturing Overhead Variance Analysis (Continuation of #
Uploaded: 2024-03-20T06:32:49.000Z
Channel: Bartleby
Description: ### Fixed Manufacturing Overhead Variance Analysis (Continuation of #2 above)**Introduction:**The Sourdough Bread Company bakes baguettes for distribution to upscale grocery stores. The company has two direct-cost categories: direct materials and di

Solution: (1). Particulars Actual costs Same budgeted (Regardless of output level) Flexible…

Business

Accounting

The Sourdough Bread Company bakes baquettes for distribution to upscale grocery stores. The company has two direct-cost categories: direct materials and direct manufacturing labor. Variable manufacturing overhead is allocated to products on the basis of standard direct manufacturing labor-hours. Following is some budget data for the Sourdough Bread Company:

The Sourdough Bread Company bakes baquettes for distribution to upscale grocery stores. The company has two direct-cost categories: direct materials and direct manufacturing labor. Variable manufacturing overhead is allocated to products on the basis of standard direct manufacturing labor-hours. Following is some budget data for the Sourdough Bread Company:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

The controller at Wesson Company's manufacturing plant has provided you with the following information for the first quarter's operations: Direct materials Fixed manufacturing overhead costs Sales price Variable manufacturing overhead Direct labor Fixed marketing and administrative costs Units produced and sold during the quarter Variable marketing and administrative costs Required: a. Determine the variable cost per unit. b. Determine the variable manufacturing cost per unit. c. Determine the full absorption cost per unit. d. Determine the full cost per unit. e. Determine the profit margin per unit. f. Determine the gross margin per unit. g. Determine the contribution margin per unit. Note: Round your answer to 2 decimal places. a. Variable cost per unit b. Variable manufacturing cost per unit c. Full absorption cost per unit d. Full cost per unit e. Profit margin per unit f. Gross margin per unit g. Contribution margin per unit $ 116 per unit $ 2,540,000 $ 525 per unit $57 per unit…
Joker Ltd manufactures two products, Normal and Plus. It has recently implemented an activity-based costing system for its manufacturing overhead costs, with the budgeted activity cost and budgeted quantity of activity driver as follows: Activity Budgeted Activity Cost Activity Driver Budgeted Quantity of Activity Driver Labour-related 205,000 Direct labour hours 41,000 Machine setups 227,000 Number of setups 5,000 General factory 340,000 Machine hours 34,000 772,000 The breakdown of the expected consumption of activities by the two products is as follows: Normal Plus Labour-related 25,000 16,000 Machine setups 2,000 3,000 General factory 20,000 14,000 For the next accounting period, the expected production volume of Normal is 4,500 units and Plus is 3,000 units. Required:Calculate the overhead cost per unit of a Plus.
Comparison of Methods of Allocation Duweynie Pottery, Inc., is divided into two operating divisions: Pottery and Retail. The company allocates Power and General Factory department costs to each operating division. Power costs are allocated on the basis of the number of machine hours and general factory costs on the basis of square footage. No effort is made to separate fixed and variable costs; however, only budgeted costs are allocated. Allocations for the coming year are based on the following data: Use the rounded values for subsequent calculations. Support Departments Operating Divisions Power General Factory Pottery Retail Overhead costs $150,000 $171,600 $97,000 $55,000 Machine hours 2,000 2,500 7,000 3,000 Square footage 2,500 1,700 4,000 6,000 Round all allocation ratios to four significant digits. Round all allocated amounts to the nearest dollar. Required: 3. Allocate the support service costs using the reciprocal method. Note: If…
Help with C. and D. please
Georgetown Metal Works produces two types of metal lamps. Georgetown manufactures 17,500 basic lamps and 6,160 designer lamps. Its activity-based costing system uses two indirect-cost pools. One cost pool is for setup costs and the other for general manufacturing overhead. Georgetown allocates setup costs to the two lamps based on setup labour-hours and general manufacturing overhead costs on the basis of direct manufacturing labour-hours. It provides the following budgeted cost information. (Click the icon to view the information.) Calculate the total budgeted costs of the basic and designer lamps using Georgetown' activity-based costing system. Begin by calculating the overhead rates for each of the two indirect-cost pools: setup costs and general manufacturing overhead. First select the formula; then enter the applicable amounts and calculate the rate. Begin with the overhead rate for set up costs. (Round the budgeted rate to the nearest dollar. Abbreviations used: MOH =…
Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity base data by product are provided below. Activity Cost Activity Base Procurement $377,200 Number of purchase orders Scheduling $219,700 Number of production orders Materials handling $498,400 Number of moves Product development $780,800 Number of engineering changes Production $1,545,800 Machine hours Number ofPurchaseOrders Number ofProductionOrders NumberofMoves Number ofEngineeringChanges MachineHours NumberofUnits Disk drives 4,120 330 1,370 15 2,000 2,100 Tape drives 1,600 205 620 5 9,600 4,100 Wire drives 12,000 940 4,500 28 11,600 2,500 Determine the activity rate for production per machine…
Please do not Give solution in image format
Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity base data by product are provided below. Activity Cost Activity Base Procurement $356,700 Number of purchase orders Scheduling 245,900 Number of production orders Materials handling 481,200 Number of moves Product development 719,400 Number of engineering changes Production 1,487,000 Machine hours Number ofPurchaseOrders Number of ProductionOrders NumberofMoves Number ofEngineeringChanges MachineHours NumberofUnits Disk drives 3,940 270 1,350 12 1,600 1,800 Tape drives 1,900 185 590 6 9,600 4,400 Wire drives 11,300 880 3,600 28 11,300 2,000 The activity rate for the materials handling cost pool is a. $184.19 per move b. $20.81 per move c. $66.09 per…
The management of Firebolt Industries Inc. manufactures gasoline and diesel engines through two production departments, Fabrication and Assembly. Management needs accurate product cost information in order to guide product strategy. Presently, the company uses a single plantwide factory overhead rate for allocating factory overhead to the two products. However, management is considering the multiple production department factory overhead rate method. The following factory overhead was budgeted for Firebolt: 1 Fabrication Department factory overhead $571,200.00 2 Assembly Department factory overhead 253,000.00 3 Total $824,200.00 Direct labor hours were estimated as follows: Fabrication Department 5,100 hours Assembly Department 4,600 Total 9,700 hours In addition, the direct labor hours (dlh) used to produce a unit of each product in each department were determined from engineering records, as follows: Production…
manufacturer of industrial equipment has a standard costing system based on standard direct labor-hours (DLHs) as the measure of activity. Data from the company's flexible budget for manufacturin overhead are given below: Level of activity Overhead costs at the denominator activity level: Variable overhead cost Fixed overhead cost The following data pertain to operations for the most recent period: Actual hours Standard hours allowed for the actual output Actual total variable manufacturing overhead cost Actual total fixed manufacturing overhead cost 2,550 DLHs $ 8,600 $ 35,125 2,700 DLHs 2,597 DLHs $ 9,200 $ 35,525 How much overhead was applied to products during the period to the nearest dollar? Note: Do not round Intermediate calculations. Multiple Cholce $44.125 $43.725 $44.725 $44.531 $44.725
Anazi Leather Company manufactures leather handbags and moccasins. The company has been using the single plantwide factory overhead rate method but has decided to evaluate the multiple production department factory overhead rate method to allocate factory overhead. The factory overhead estimated per unit together with direct materials and direct labor will help determine selling prices. Handbags = 60,000 units, 3 hours of direct labor Moccasins = 40,000 units, 2 hours of direct labor Total budgeted factory overhead cost = $360,000 The company has two different production departments: Cutting and Sewing. The Cutting Department has a factory overhead budget of $80,000. Each unit will require 1 direct labor hour or a total of 100,000 direct labor hours. The Sewing Department estimates factory overhead in the amount of $280,000. Handbags require 2 hours of sewing time, and Moccasins require 1 hour for a total of 160,000 direct labor hours. Using the multiple production department factory…
Crash Bang, Co. uses a standard cost system and provides the following information: Standards: Static budget variable overhead $5,580.00. Static budget fixed overhead $22,380.00. Static budget direct labor hours 573 hours. Static budget number of units 21,200 units. Static budget direct labor hours 0.026 hours per unit. Crash Bang, Co. allocates manufacturing overhead to production based on standard direct labor hours. Crash Bang, Co. reported the following actual results for 2020: Actual: Number of units produced 20,800. Actual variable overhead $5,300.00 Actual fixed overhead $24,400.00. Actual direct labor hours 499. (Round your answers to two decimal places when needed and use rounded answers for all future calculations).1. Compute the variable overhead allocation rates.