Aloha Foods processes bags of organic frozen fruits sold at specialty grocery stores. (Click the icon to view additional information.) iMore Info - The company allocates manufacturing overhead based on direct labor hours. Aloha has budgeted fixed manufacturing overhead for the year to be $626,000. The predetermined fixed manufacturing overhead rate is $16.20 per direct labor hour, while the standard variable manufacturing overhead rate is $0.70 per direct labor hour. The direct labor standard for each case is one-quarter (0.25) of an hour. The company actually processed 158,000 cases of frozen organic fruits during the year and incurred $682,460 of manufacturing overhead. Of this amount, $636,000 was fixed. The company also incurred a total of 40,400 direct labor hours. Print Done much Requirement 1. How much variable overhead would have been allocated to production? How much fixed overhead would have been allocated to production? The variable overhead allocated to production is $ 27,650 Now determine the fixed overhead allocated to production. The fixed overhead allocated to production is $ 639,900 Requirement 2. Compute the variable MOH rate variance and the variable MOH efficiency variance. What do these variances tell managers? Begin by determing the formula for the variable MOH rate variance, then calculate the variable overhead rate variance. (Enter the result as a positive number. Enter rates to two decimal places. Label the variance as favorable (F) or unfavorable (U).) Variable overhead Actual hours 40,400 x ( ( $ Actual rate 1.15 Standard rate = rate variance $ 0.70 = $ 18,180 U This variance tells managers that Aloha Foods actually incurred more on variable manufacturing overhead than they would have expected given the actual hours used. Now determine the formula for the variable MOH efficiency variance, then calculate the efficiency variance. (Enter the result as a positive number. Enter any rates to two decimal places. Label the variance as favorable (F) or unfavorable (U).) Standard rate 0.70 x Actual hours 40,400 Variable overhead Standard hours allowed 39,500 efficiency variance = $ 630 U This variance tells managers that Aloha Foods used more direct labor hours than anticipated for the actual volume of output. Requirement 3. Compute the fixed MOH budget variance and the fixed overhead volume variance. What do these variances tell managers? Begin by determing the formula for the fixed MOH budget variance, then calculate the fixed budget variance. (Enter the result as a positive number. Label the variance as favorable (F) or unfavorable (U).) Actual fixed overhead 636,000 Budgeted fixed overhead 626,000 This auction is completo. Move your cursor over or tan on the red arrows to con incorrect ancwor Fixed MOH = budget variance = $ 10,000 U This variance tells us that Aloha Foods spent more than anticipated on fixed overhead costs. Now determine the formula for the fixed overhead volume variance, then calculate the volume variance. (Enter the result as a positive number. Label the variance as favorable (F) or unfavorable (U).) Budgeted fixed overhead 626,000 Std. fixed overhead cost allocated to production 639,900 Fixed MOH volume variance = $ 13,900 F This variance tells managers that Aloha Foods produced more cases of frozen organic fruits than originally expected. This question is complete. Move your cursor over or tap on the red arrows to see incorrect answers