Question

Requirement Fill in the blanks. Use F for favorable and U for unfavorable: (Click the icon to view the table.) Nivola, Inc., produces chemicals for large biotech companies. It has the following data for manufacturing overhead costs during August 2017: Variable Fixed Actual costs incurred $31,500 $13,500 Costs allocated to products 35,000 15,400 Flexible budget 14,400 Actual input x budgeted rate 30,800

Answer 1

Variable		Fixed
(1) Spending variance	$       700	U	$       900	F
(2) Efficiency variance	$       4200	F		N
(3) Production volume variance		N	$       1,000	F
(4) Flexible budget variance	$      3500	F	$       900	F
(5) Underallocated (overallocated) manufacturing overhead	$       3500	F	$       1900	F

Working:

Spending variance:

Variable: Actual costs incurred - (Actual input x Budgeted rate) = 31500- 30800=700 U

Fixed: Actual costs incurred - Flexible budget = 13500- 14400= 900F

Efficiency variance- Variable = (Actual input x Budgeted rate) - Costs allocated to products = 30800 -35000= 4200 F

Production volume variance -fixed = Flexible budget - Costs allocated to products = 14400 - 15400 =1000 F

Flexible budget variance below:

Variable: Actual costs incurred - Costs allocated to products = 31500 - 35000 = 3500 F

Fixed: Actual costs incurred - flexible budget= 13500 - 14400 = 900 F

Underallocated (overallocated) manufacturing overhead = Actual costs incurred - Costs allocated to products

Variable: 31500- 35000 = 3500 F

Fixed: 13500- 15400= 1900F