Homework: chapter 8 Score: 0 of 30 pts E8-19 (similar to) Save 4016(1 complete)
ID: 2573529 • Letter: H
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Homework: chapter 8 Score: 0 of 30 pts E8-19 (similar to) Save 4016(1 complete) HW Score: 0.89%, 1.33 of 150 pts Question Help The Sourdough Bread Company provides the following additional data for the year The Sourdough Bread Company bakes baguettes for distribution to upscale grocery stores. The company has two direct-cost categories: direct materials and ended December 31, 2014 direct manufacturing labor. The Sourdough Bread Company allocates foxed manufacturing overhead to products on the basis of standard direct manufac turing labor-hours, For 2014, the follong s some budget data for the Sourdough Bread Company 2,900,000 baguettes 2,300,000 baguettes Planned (budgeted) output Actual production Budgeted direct manufacturing labor58,000 hours Actual direct manufacturing labor Actual fixed manufacturing overhead $280,000 Direct manufacturing labor use Fxed manufacturing overhead 002 hours per baguete $400 per direct manufacturing 40,600 hours labor hour Read the tequirements Requirement 1. Prepare a variance analysis of fixed manufacturing overhead cost. Begin by completing the table below for the fixed manufacturing overhead that will be used to calculate the variances Same Budgeted Lump Sum Actual Costs Regardless ofFlexibleAllocated Incurred Output Level BudgetOverhead Fixed MOH e Requrements 1. Prepare a variance analysis of fixed manufacturing overhead cost 2. Is foxed overhead underalocated or overallocated? By what amount? 3. Comment on your results Discuss the variances and explain what may be driving them. Print Done Enter any number in the edit fields and then click Check Answer 2 parts remaining Clear All Check AnswerExplanation / Answer
1.
Fixed MOH Spending variance = Budgeted Fixed MOH - Actual Fixed MOH = $184000 - $280000 = $96000 Unfavorable
Fixed MOH Volume variance = Budgeted Fixed MOH - Allocated Fixed MOH = $184000 - $162400 = $21600 Unfavorable
Total Fixed MOH variance = $117600 Unfavorable
2. Fixed overhead is underallocated by $21600.
3. The spending variance is unfavorable as the actual fixed overheads incurred are much higher than those budgeted at the same level of activity while the volume variance is unfavorable as the actual hours are lower than the standard hours allowed for the same level of activity.
Actual Costs Incurred Same Budgeted Lump Sum Regardless of Output Level FlexibleBudget Allocated
Overhead Fixed MOH $ 280000 232000 184000 162400 (58000 x $4) (2300000 x 0.02 x $4) (40600 x $4)
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