Now calculate the following amounts for the fixed overhead. Same budgeted lump sum Actual costs regardless of Allocated incurred output level overhead Fixed OH Now compute the spending variance and production-volume variances using the amounts you calculated above. (If no variance exists leave the dollar value blank. Label the variance as favorable (F), unfavorable (U) or never a variance (N).) Spending Production-Volume Variance Variance Fixed OH Requirement 3. Comment on EMN's overhead variances and suggest how Jason Parker might manage EMN's variable overhead differently from its fixed overhead costs. This means that EMN had over budget in either or both the cost of individual items in the overhead cost pools, The variable overhead spending variance is and the fixed overhead spending variance is or the usage of these individual items per unit of the allocation base (delivery time). (Round your answer to two decimal places, "X.XX".) The efficiency variance for variable overhead costs results from use of the cost allocation baseeach delivery takes hours versus a budgeted 0.70 hours. overhead costs by long-term planning of capacity rather than day-to-day decisions. For overhead, a mix of long-run planning and daily monitoring of the use of individual items is required to manag EMN can best manage its costs efficiently. The production-volume variance for overhead costs arises because EMN has unused overhead resources that it may seek to reduce in the long run. Now calculate the following amounts for the fixed overhead. Same budgeted lump sum Actual costs regardless of Allocated incurred output level overhead Fixed OH Now compute the spending variance and production-volume variances using the amounts you calculated above. (If no variance exists leave the dollar value blank. Label the variance as favorable (F), unfavorable (U) or never a variance (N).) Spending Production-Volume Variance Variance Fixed OH Requirement 3. Comment on EMN's overhead variances and suggest how Jason Parker might manage EMN's variable overhead differently from its fixed overhead costs. This means that EMN had over budget in either or both the cost of individual items in the overhead cost pools, The variable overhead spending variance is and the fixed overhead spending variance is or the usage of these individual items per unit of the allocation base (delivery time). (Round your answer to two decimal places, "X.XX".) The efficiency variance for variable overhead costs results from use of the cost allocation baseeach delivery takes hours versus a budgeted 0.70 hours. overhead costs by long-term planning of capacity rather than day-to-day decisions. For overhead, a mix of long-run planning and daily monitoring of the use of individual items is required to manag EMN can best manage its costs efficiently. The production-volume variance for overhead costs arises because EMN has unused overhead resources that it may seek to reduce in the long run
