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.
The following data were selected from the records of Fluwars Company for the year ended December 31, current year:
Balances at January 1, current year:
Accounts receivable (various customers)
$
111,500
Allowance for doubtful accounts
11,200
The company sold merchandise for cash and on open account with credit terms 1/10, n/30, without a right of return.
The following transactions occurred during the current year:
Sold merchandise for cash, $252,000.
Sold merchandise to Abbey Corp; invoice amount, $36,000.
Sold merchandise to Brown Company; invoice amount, $47,600.
Abbey paid the invoice in (b) within the discount period.
Sold merchandise to Cavendish Inc.; invoice amount, $50,000.
Collected $113,100 cash from customers for credit sales made during the year, all within the discount periods.
Brown paid its account in full within the discount period.
Sold merchandise to Decca Corporation; invoice amount, $42,400.
Cavendish paid its account in full after the…
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Chapter 8 Solutions
Horngren's Cost Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText - Access Card Package (16th Edition)
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
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