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8-21 & 8-22 & 8-23 ASSIGNMENT MATI Pearson My Regu Exercises 3-21 Variable manufacturing overhead, variance analysis. Omega Arts is a manufacturer of designer vases.
8-21 & 8-22 & 8-23
ASSIGNMENT MATI Pearson My Regu Exercises 3-21 Variable manufacturing overhead, variance analysis. Omega Arts is a manufacturer of designer vases. The cost of each vase is the sum of three variable costs (direct material costs, direct manufactur- ing labor costs, and manufacturing overhead costs) and one fixed-cost category (manufacturing overhead costs). Variable manufacturing overhead cost is allocated to each vase on the basis of budgeted direct manufacturing labor-hours per vase. For June 2017, each vase is budgeted to take 4 labor-hours. Budgeted variable manufacturing overhead cost per labor-hour is $14. The budgeted number of vases to be manufac- tured in June 2017 is 1,100. Actual variable manufacturing costs in June 2017 were $65,205 for 1,150 vases started and completed. There were no beginning inventories or ending inventories for the vases. Actual direct manufacturing labor- hours for June were 4,830. 1. Compute the flexible-budget variance, the spending variance, and the efficiency variance for variable manufacturing overhead. 2. Comment on the results. 8-22 Fixed-manufacturing overhead, variance analysis (continuation of 8-21). Omega Arts allocates fixed manufacturing overhead to each vase using budgeted direct manufacturing labor-hours per vase. Data pertaining to fixed manufacturing overhead costs for June 2017, are budgeted 570,400 and actual 1. Compute the spending variance for fixed manufacturing overhead. Comment on the results. 2. Compute the production-volume variance for June 2017. What inferences can Omega Arts draw from this variance? 8-23 Variable manufacturing overhead variance analysis. The French Bread Company bakes baguettes for distribution to upscale grocery stores. The company has two direct-cost categories: direct materials and direct manufacturing labor. Variable manufacturing overhead is allocated to products on the basis of standard direct manufacturing labor-hours. Following is some budget data for the French Bread Company Direct manufacturing labor use 0.02 hours per baguette Variable manufacturing overhead $10.00 per direct manufacturing labor-hour The French Bread Company provides the following additional data for the year ended December 31, 2017: Planned (budgeted) output 3.200,000 baguettes Actual production 2,800,000 baguettes Direct manufacturing labor 50,400 hours Actual variable manufacturing overhead $72,200. Recimo $680,400 Reau 1. What is the denominator level used for allocating variable manufacturing overhead? (That is, for how many direct manufacturing labor-hours is French Bread budgeting? 2. Prepare a variance analysis of variable manufacturing overhead. Use Exhibit 8-4 page 324) for reference. 3. Discuss the variances you have calculated and give possible explanations for them Step by Step Solution
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