P8-37 (similar to) Question Help Gleaming, Inc., is a manufacturer of vacuums and uses standard costing. Manufacturing overhead (both variable and fixed) is allocated to products on the basis of budgeted machine-hours. In 2017, budgeted fixed manufacturing overhead cost was $21,000,000. Budgeted variable manufacturing overhead was $9 per machine-hour. The denominator level was 1,000,000 machine-hours. Read the requirements. Requirement 1. Prepare a graph for fixed manufacturing overhead. The graph should display how Gleaming, Inc.'s fixed manufacturing overhead costs will be depicted for the purposes of (a) planning and control and (b) inventory costing. (Enlarge the graph and use the tool line button displayed to draw the graph.) Fixed Manufacturing Overhead Costs - X i Requirements $21.000.000 $19.500.000 $18.000.000 $16.500.000 Total Fixed Manufacturing Overhead Costs $12.000.000 $10.500 000 $7.500.000 $9.000.000 0 400,000 800.000 200.000 1. Prepare a graph for fixed manufacturing overhead. The graph should display how Gleaming, Inc.'s fixed manufacturing overhead costs will be depicted for the purposes of (a) planning and control and (b) inventory costing. 2. Suppose that 1,100,000 machine-hours were allowed for actual output produced in 2017, but 1,125,000 actual machine-hours were used. Actual manufacturing overhead was $10,687,500, variable, and $20,950,000, fixed. Compute (a) the variable manufacturing overhead spending and efficiency variances and (b) the fixed manufacturing overhead spending and production-volume variances. 3. What is the amount of the under-or overallocated variable manufacturing overhead and the under- or overallocated fixed manufacturing overhead? Why are the flexible-budget variance and the under-or overallocated overhead amount always the same for variable manufacturing overhead but rarely the same for fixed manufacturing overhead? 4. Suppose the denominator level was 700,000 rather than 1,000,000 machine-hours. What variances in requirement 2 would be affected? Recompute them. Click to enlarge graph Machine-Hours Print [ Done] Done Click the graph, choose a tool in the palette and follow the instructions to create your graph. 9 parts remaining Clear All Check Answer P8-37 (similar to) Question Help Gleaming, Inc., is a manufacturer of vacuums and uses standard costing. Manufacturing overhead (both variable and fixed) is allocated to products on the basis of budgeted machine-hours. In 2017, budgeted fixed manufacturing overhead cost was $21,000,000. Budgeted variable manufacturing overhead was $9 per machine-hour. The denominator level was 1,000,000 machine-hours. Read the requirements. Requirement 1. Prepare a graph for fixed manufacturing overhead. The graph should display how Gleaming, Inc.'s fixed manufacturing overhead costs will be depicted for the purposes of (a) planning and control and (b) inventory costing. (Enlarge the graph and use the tool line button displayed to draw the graph.) Fixed Manufacturing Overhead Costs - X i Requirements $21.000.000 $19.500.000 $18.000.000 $16.500.000 Total Fixed Manufacturing Overhead Costs $12.000.000 $10.500 000 $7.500.000 $9.000.000 0 400,000 800.000 200.000 1. Prepare a graph for fixed manufacturing overhead. The graph should display how Gleaming, Inc.'s fixed manufacturing overhead costs will be depicted for the purposes of (a) planning and control and (b) inventory costing. 2. Suppose that 1,100,000 machine-hours were allowed for actual output produced in 2017, but 1,125,000 actual machine-hours were used. Actual manufacturing overhead was $10,687,500, variable, and $20,950,000, fixed. Compute (a) the variable manufacturing overhead spending and efficiency variances and (b) the fixed manufacturing overhead spending and production-volume variances. 3. What is the amount of the under-or overallocated variable manufacturing overhead and the under- or overallocated fixed manufacturing overhead? Why are the flexible-budget variance and the under-or overallocated overhead amount always the same for variable manufacturing overhead but rarely the same for fixed manufacturing overhead? 4. Suppose the denominator level was 700,000 rather than 1,000,000 machine-hours. What variances in requirement 2 would be affected? Recompute them. Click to enlarge graph Machine-Hours Print [ Done] Done Click the graph, choose a tool in the palette and follow the instructions to create your graph. 9 parts remaining Clear All Check
