Question

Alden Company uses a three-variance analysis for factory overhead variances. Practical capacity is defined as 32 setups and 32,000 machine hours to manufacture 6,400 units for the year. Selected data for 2019 follow: $ 102,400 174,000 $276,400 $496,000 Budgeted fixed factory overhead: Setup cost Other Total factory overhead cost incurred Variable factory overhead rate: Per setup Per machine hour Total standard machine hours allowed for the units manufactured Machine hours actually worked Actual total number of setups Actual number of units produced during the year Standard number of setups for units produced during the year $ $ 550 6.00 24,000 hours 27,000 hours 28 4,800 24

Answer 1

Dear Student , Please see below answer line by line . Below answer little lengthy because in the Question , asked three  Variance  in part 1 and part 2 . All number are based on Question . Where ever need formula I updated the same and explain also . I used a,b c -- d to easy reference and calculation purpose .

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Student as per HomeworkLib policy , I have answered 2 question with 6 sub part . I will provide last one shortly . Please review line wise

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Alden company uses three - level of Factory Overhead variance
32 set up
32000 Machine Hrs
Manufacture - 6400 unit
On the above information basis - calculate
Manufacturing hrs / Unit			5.00	32000/6400
Total Standard machine hr require to unit Manufacture-Hrs					24000
Manufacturing hrs / Unit					5.00
Number of unit					4,800	24000/5
After machine hr base activity , we need to determined Set up per unit
Set up	32
Manufacturing unit		6,400
Budgeted unit per set Up			200
Numbe of Unit manufactured based on above set up				24	4800/200
Need to derived spending Variance
Fixed overhead $
Actual total number of set up			28
Per set up cost $			550
			15,400	a
Actual Overhead
per machine hr $			6
Machine hrs actually worked			27,000
			1,62,000	b
(6*27000)
variable OH(a+b) $			1,77,400
Fixed overhead $			2,76,400
Actual Overhead $			4,96,000
Need to derived spending Variance
(Variable OH + Fixed OH )- ( actual OH)
variable OH(a+b) $		1,77,400
Fixed overhead $		2,76,400
Total OH		4,53,800
Less
Actual Overhead $		4,96,000
Spending Variance - $		-42,200	Unfavorable
Efficiency variance
Fixed overhead $		2,76,400
variable OH(a+b) $		1,77,400
Fixed overhead $		2,76,400
TotalOH		4,53,800
Number of Unit manufactured based on above set up				24
( As above)
Per set up $				550
Total Standard machine hr require to unit Manufacture-Hrs				24,000
per machine hr $			6
Efficiency variance $				-20,200	Unfavorable
('24*550)+(6*24000)+ $276400-$453800
Flexible Budget variance
This is sum of Spending + Efficiency Variance
Spending Var $		-42,200
Efficiency variance $		-20,200
Flexible Budget variance $		-62,400	Unfavorable

Part 2 answer
	The budgeted total fixed overhead $			1,74,000
	Standard overhead rate per set up $			3,750
	Actual Overhead $			4,96,000
	Actual total number of set up			28
	Standard overhead rate per set up $			3,750
	Total ( 28*3750) $			1,05,000	A
	Per machine hr $			6
	Machine hr actually worked hrs			27,000
	Total ( 27000*6) $			1,62,000	B
	The budgeted total fixed overhead $			1,74,000	C
	Actual Overhead $			4,96,000	D
	Spending Variance $			A+B+C-D
	Spending Variance $			-55,000	Unfavorable
	Efficiency variance
	Numbe of Unit manufactured based on above set up				24
	( As above)
	Standard overhead rate per set up $			3,750
	Total ( 24*$3750) $			90,000	A
	Per machine hr $		6
	Total Standard machine hr require to unit Manufacture-Hrs		24,000
	Total ( 6*$24000) $		1,44,000	B
	The budgeted total fixed overhead $		1,74,000	C
	As per calculation
	Total ( as above)	4,41,000	D
	($105000+$162000+$174000)
	Efficiency variance	(A+B+C)-D
	Efficiency variance $	-33,000	Unfavorable

This is sum of Spending + Efficiency Variance
Spending Var $	-55,000
Efficiency variance $	-33,000
Flexible Budget variance $	-88,000	Unfavorable