Use the following information for the Exercises below. (Algo) [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 53,750 $295,625 53,750 $ 349,375 Actual Results 50,000 $ 354,500
Use the following information for the Exercises below. (Algo) [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 53,750 $295,625 53,750 $ 349,375 Actual Results 50,000 $ 354,500
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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![Use the following information for the Exercises below. (Algo)
[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
53,750
$295,625
53,750
$ 349,375
Actual
Results
50,000
$ 354,500
Exercise 21-18 (Algo) Volume and controllable variances LO P4
(1) Compute the overhead volume variance. Indicate variance as favorable or unfavorable.
(2) Compute the overhead controllable variance. Indicate variance as favorable or unfavorable.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F77b312da-d2ed-4179-a84e-623485f1f533%2Fee19eea9-9c77-483f-8183-1843cee7b13a%2Fu1faa5_processed.png&w=3840&q=75)
Transcribed Image Text:Use the following information for the Exercises below. (Algo)
[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
53,750
$295,625
53,750
$ 349,375
Actual
Results
50,000
$ 354,500
Exercise 21-18 (Algo) Volume and controllable variances LO P4
(1) Compute the overhead volume variance. Indicate variance as favorable or unfavorable.
(2) Compute the overhead controllable variance. Indicate variance as favorable or unfavorable.
Transcribed Image Text:Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Compute the overhead controllable variance. Indicate variance as favorable or unfavorable. (Indicate the effect of the
variance by selecting favorable, unfavorable, or no variance.)
Budgeted (flexible) overhead
Actual total overhead
Controllable variance
Required 1 Required 2
Controllable variance
Complete this question by entering your answers in the tabs below.
Standard overhead applied
Budgeted (flexible) overhead
Volume variance
Compute the overhead volume variance. Indicate variance as favorable or unfavorable. (Indicate the effect of the variance by
selecting favorable, unfavorable, or no variance.)
Volume Variance.
Unfavorable
Answer is not complete.
✓
Required 1
Required 2
>
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