McFleury

supplies restaurants with many premanufactured ingredients? (such as bags of frozen french? fries). Assume that the

McFleury

french fries manufacturing facility actually incurred

$2,750,000

of manufacturing overhead for the year

?($1,775,000

variable overhead and

$975,000

fixed? overhead). Based on the actual output of french? fries, the flexible budget indicated that total manufacturing overhead should have been

$2,983,200.

Using a standard costing? system, the company allocated

$3,075,000

of manufacturing overhead to production

?($2,331,000

variable overhead and

$744,000

fixed? overhead). The actual machine hours during the year were

250,000?,

which was

9,000

hours less than the standard.

McFleury?'s

managers had estimated

264,000

hours when they created the budget. Manufacturing overhead is allocated based on machine hours.

1. Calculate the total manufacturing overhead variance. What does this tell managers? 2. Determine the overhead flexible budget variance. Determine the three separate variances that are involved in the flexible budget variance (the variable overhead spending and efficiency variances plus the fixed overhead budget variance). What does this tell managers? 3. Determine the production volume variance. What does this tell managers? 4. Double check: Do the two variances (computed in Requirements 2 and 3) sum to the total overhead variance computed in Requirement 1?1. Calculate the total manufacturing overhead variance. What does this tell managers? Identify the formula labels, and calculate the total overhead variance. Total overhead variance: Total overhead variance =