Fixed manufacturing overhead variance analysis (continuation of 8-23). The Sourdough Bread Company also allocates fixed manufacturing overhead to products on the basis of standard direct manufacturing labor-hours. For 2017, fixed manufacturing overhead was budgeted at $3.00 per direct manufacturing labor-hour. Actual fixed manufacturing overhead incurred during the year was $294,000. A. Prepare a variance analysis of fixed manufacturing overhead cost. Use Figure 8-4 (page 304) as a guide. Required B. Is fixed overhead underallocated or overallocated? By what amount? C. Comment on your results. Discuss the variances and explain what may be driving them.
Fixed manufacturing overhead variance analysis (continuation of 8-23). The Sourdough Bread Company also allocates fixed manufacturing overhead to products on the basis of standard direct manufacturing labor-hours. For 2017, fixed manufacturing overhead was budgeted at $3.00 per direct manufacturing labor-hour. Actual fixed manufacturing overhead incurred during the year was $294,000. A. Prepare a variance analysis of fixed manufacturing overhead cost. Use Figure 8-4 (page 304) as a guide. Required B. Is fixed overhead underallocated or overallocated? By what amount? C. Comment on your results. Discuss the variances and explain what may be driving them.
Fixed manufacturing overheadvariance analysis (continuation of 8-23). The Sourdough Bread Company also allocates fixed manufacturing overhead to products on the basis of standard direct manufacturing labor-hours. For 2017, fixed manufacturing overhead was budgeted at $3.00 per direct manufacturing labor-hour. Actual fixed manufacturing overhead incurred during the year was $294,000.
A. Prepare a variance analysis of fixed manufacturing overhead cost. Use Figure 8-4 (page 304) as a guide.
Required
B. Is fixed overhead underallocated or overallocated? By what amount?
C. Comment on your results. Discuss the variances and explain what may be driving them.
Definition Definition Total cost of procuring or producing a product or the cost that an individual or business owner undertakes for the manufacturing of goods.
Aurora Health Center has fixed costs of $240,000. After 32,000 visits, its fixed costs increase by $38,000 since it has to hire an additional front desk person to handle the additional volume. Variable costs are $5 per visit. If you are budgeting for 28,000 visits, what is your average cost per visit?
Help this question
Chapter 8 Solutions
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.