Ana Carillo and Associates is a medium-sized company located near a large metropolitan area in the Midwest. The company manufactures cabinets of mahogany, oak, and other fine woods for use in expensive homes, restaurants, and hotels. Although some of the work is custom, many of the cabinets are a standard size. One such non-custom model is called Luxury Base Frame. Normal production is 1,000 units. Each unit has a direct labor hour standard of 5 hours. Overhead is applied to production based on standard direct labor hours. During the most recent month, only 970 units were produced; 4,500 direct labor hours were allowed for standard production, but only 4,000 hours were used. Standard and actual overhead costs were as follows. Actual (970 units) Standard (1,000 units) $ 13,000 46,700 24,500 Indirect materials Indirect labor (Fixed) Manufacturing supervisors salaries (Fixed) Manufacturing office employees salaries (Fixed) Engineering costs Computer costs Electricity (Fixed) Manufacturing building depreciation (Fixed) Machinery depreciation (Fixed) Trucks and forklift depreciation Small tools (Fixed) Insurance (Fixed) Property taxes Total 14,100 29,300 10,900 2,700 8,700 3,300 1,600 800 500 300 $ 13,400 55,400 23,900 13,600 27,200 10,900 2,700 8,700 3,300 1,600 1,500 500 300 $163,000 $156,400 Your answer is correct. Determine the overhead application rate. (Round answer to 2 decimal places, e.g. 15.75.) Overhead application rate 31.28 per direct labor hour Your answer is correct. Determine how much overhead was applied to production. Applied overhead 140760 LINK TO TEXT Your answer is partially correct. Try again. Calculate the total overhead variance, controllable variance, and volume variance. (Round variable overhead to 2 decimal places and final answers to 0 decimal places, e.g. 1,575.) X Total overhead variance Unfavorable X Controllable variance Unfavorable X Volume variance Unfavorable LINK TO TEXT Expand Your Critical Thinking 24-02 e (Essay) Ana Carillo and Associates is a medium-sized company located near a large metropolitan area in the Midwest. The company manufactures cabinets of mahogany, oak, and other fine woods for use in expensive homes, restaurants, and hotels. Although some of the work is custom, many of the cabinets are a standard size. One such non-custom model is called Luxury Base Frame. Normal production is 1,000 units. Each unit has a direct labor hour standard of 5 hours. Overhead is applied to production based on standard direct labor hours. During the most recent month, only 900 units were produced; 4,500 direct labor hours were allowed for standard production, but only 4,000 hours were used. Standard and actual overhead costs were as follows. Indirect materials Indirect labor (Fixed) Manufacturing supervisors salaries (Fixed) Manufacturing office employees salaries (Fixed) Engineering costs Computer costs Electricity (Fixed) Manufacturing building depreciation (Fixed) Machinery depreciation (Fixed) Trucks and forklift depreciation Small tools (Fixed) Insurance (Fixed) Property taxes Total Standard (1,000 units) $ 12,000 43,000 22,500 13,000 27,000 10,000 2,500 8,000 3,000 1,500 700 500 300 $144,000 Actual (900 units) $ 12,300 51,000 22,000 12,500 25,000 10,000 2,500 8,000 3,000 1,500 1,400 500 300 $150,000 (e) Discuss causes of the overhead variances. What can management do to improve its performance next month
