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* More Info The company allocates manufacturing overhead based on direct labor hours. Armstrong has budgeted fixed manufacturing overhead for the year to be $633,000.
* More Info The company allocates manufacturing overhead based on direct labor hours. Armstrong has budgeted fixed manufacturing overhead for the year to be $633,000. The predetermined fixed manufacturing overhead rate is $16.40 per direct labor hour, while the standard variable manufacturing overhead rate is $0.80 per direct labor hour. The direct labor standard for each case is one-quarter (0.25) of an hour. The company actually processed 156,000 cases of frozen organic fruits during the year and incurred $685,050 of manufacturing overhead. Of this amount, $642,000 was fixed. The company also incurred a total of 41,000 direct labor hours. 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 $ 31,200 Now determine the fixed overhead allocated to production. The fixed overhead allocated to production is $ 639,600 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 x Standard rate Actual rate rate variance 41,000 *( $ 0.80 1.05 = $ 10,250'u This variance tells managers that Armstrong 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).) Variable overhead efficiency variance X 0 Requirements 1. How much variable ov manufacturing overhead cated to production? How much fixed overhead would have be 2. Compute the variable MOB 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? Print Done
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