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16. (15 points) Prairie Company manufactures pneumatic valves for equipment manufacturing. Both variable and fixed overhead are allocated based on machine hours. The following
16. (15 points) Prairie Company manufactures pneumatic valves for equipment manufacturing. Both variable and fixed overhead are allocated based on machine hours. The following information pertains to the company's manufacturing overhead: Actual Budget Units produced 22,000 20,000 Machine hours 28,000 30,000 Variable overhead costs $341,600 $360,000 Fixed overhead costs $245,200 $210,000 a. Compute a three-column variance analysis of variable manufacturing overhead including variance descriptions. b. Compute a three-column variance analysis of fixed manufacturing overhead including variance descriptions. Indicate if FOH is over or under allocated. c. Your manager has asked you "what is the most important insight" about the production volume variance from your analysis. What is your answer? (provide insights, not repeating financial results).
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