Exercise $5$:

ABC company's monthly flexible overhead budget, displayed in the blow, shows budgeted variable and fixed manuafacturing $-$ overhead costs at $4$ levels of production activity.

During September, ABC company produced $5\mathrm{.}000$ multilayered fancy cakes. Since production standards allow three process hours per cake, the total standard allowed number of process hours is $20\mathrm{.}000$ hours with budgeted overhead cost $$120\mathrm{.}000$ of variable overhead and $$70\mathrm{.}000$ fixed overhead

From the cost accounting records. The ABC company's director of cost management determined that the actual overhead cost of $5\mathrm{.}000$ multilayered fancy cakes were actually incurred during September as follows:

Variable overhead $$136\mathrm{.}500$;

Fix overhead

$$77\mathrm{.}700$

The production supervior's records indicate that the actual total process time in September was $21\mathrm{.}000$ hours.

Required:

Calculate variable production overhead variances follows:

a$.$ The variable overhead total variance

b$.$ The variable production overhead expenditure $($spending$)$ variance

c$.$ The variable production overhead efficiency variance

d$.$ Draw graph variable production overhead variance

Calculate fixed production overhead variance overhead rate is $$3,0.$

follows: but if predetermined fixed

b$.$ The fixed $0$ expenditure variance

c$.$ The fixed Overhead volume