Ollivander manufactures premium Magic Wands. The following are some manufacturing overhead data for Magic Wands for the year ended March 31, 2020.

1. For the year ended March 2020, compute the variance, indicating whether each is favourable (F) or unfavourable (U).

   1. Variable manufacturing overhead efficiency variance

   2. Total manufacturing overhead rate variance

   3. Production volume variance

2. Select any two of the variances calculated and prepare an explanation (or possible explanation) that you would present to the management team. Suggestion: select two of the more significant variances OR select two that are related to eachother,

3. Prepare the journal entry(ies) to record your variances and write them off at the end of the year. Assume the variance accounts are written off to Cost of Goods Sold. Show your work.

4. Before making any adjustments for variances, (ie. The journal entry you wrote in part 3) will net income for the year be over-stated, or under-stated?

Ollivander manufactures premium Magic Wands. The following are some manufacturing overhead data for Magic Wands for the year ended March 31, 2020. Manufacturing Overhead Variable Fixed Actual Results $60,560 $350,210 Flexible Budget $76,800 $348,096 Allocated Amount $76,800 $375,897 Budgeted number of wands (output): 892 Planned allocation rate: 3 machine-hours per wand Actual number of machine-hours used: 1,445 hours Static-budget variable manufacturing overhead costs: $71,120 Ollivander looks at this information and needs some help with interpretation. When comparing actual results to the flexible budget it looks like he performed well on variable overhead but poorly on fixed overhead; yet, comparing to the allocated amount tells a different story. Ollivander needs your help interpreting these variances! Can you help Ollivander