micament 1 Lammuch variable overhead vould have been allocated to production 2 Homuch fivedewerhead Requirements 1. How much variable o manufacturing overhead cated to production? How much fixed overhead would have been locateu w prouuuun! 2. Compute the variable MOH rate variance and the variable MOH efficiency variance. What do these variances tell managers? 3. Compute the fixed MOH budget variance and the fixed overhead volume variance. What do these variances tell managers? ce Print Done er More Info e le OV The company allocates manufacturing overhead based on direct labor hours. Armstrong has budgeted fixed manufacturing overhead for the year to be $625,000. The predetermined fixed manufacturing overhead rate is $15.60 per direct labor hour, while the standard variable manufacturing overhead rate is $0.50 per direct labor hour. The direct labor standard for each case is one-quarter (0.25) of an hour. The company actually processed 164,000 cases of frozen organic fruits during the year and incurred $661,500 of manufacturing overhead. Of this amount, $630,000 was fixed. The company also incurred a total of 42,000 direct labor hours. er C ate et re Print Done 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 $ Now determine the fixed overhead allocated to production. The fixed overhead allocated to production is $ 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 x( rate variance x 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).) Variable overhead x efficiency variance This variance tells managers that Armstrong Foods used 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).) 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).) Fixed MOH = budget variance This variance tells us that Armstrong Foods spent 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).) Fixed MOH = volume variance
