Question

2) Different management levels in Bates, Inc., require varying degrees of managerial accounting information. Because of the need to comply with the managers' requests, four different variances for manufacturing overhead are computed each month. The information for the September overhead expenditures is as follows:

   Budgeted output units                                        6,400 units

   Budgeted fixed manufacturing overhead          $25,600

   Budgeted variable manufacturing overhead             $3 per direct labor hour

   Budgeted direct manufacturing labor hours               2 hours per unit

   Fixed manufacturing costs incurred                  $27,000

   Direct manufacturing labor hours used              12,000

   Variable manufacturing costs incurred              $35,600

   Actual units manufactured                                  6,500

Required: Compute a 4-variance analysis for the plant controller.

*PLEASE FILL OUT ALL THE BOXES*

	Actual Results	Spending Variance	Actual Input Qty.   * Budgeted Rate	Efficiency Variance	Flexible Budget Budgeted Input Qty. for Allowed Output* Budgeted Rate	Production Variance	Allocated: Budgeted Input Qty. Allowed for Actual Output * Budgeted Rate
Units
Actual or Budgeted Input Qty.
Variable Overhead						Never a Variance
Fixed Overhead				Never a Variance

Answer 1

& DIFF 4 variance Repot Actuch spending ACNOM Result variance Input оту, Efficiency flexible Allocated variance Byagel prod. Bu Byd. InPoty variance for actice for allowed output outputy Budgeteg Budgeteg Rat Rate 6400 6400 budgeteg Raik units 6500 6 500 Achio (13000 (13000X3 (12000 Budgold coriven) thputyory variable 35600 400 F 36000 39000 (12000x3) Fixed 27000 1400 U 25600 Noves a H variance LOH 39000 Heves $39000 (13000X3) avaria 25600 GOF 26000 O Variable OH spending 635600 - & 35600 suoo fav. (12000X $ 3 pes HOU) & 36000 anable of efficiency variance is 3X C12ooo - 13000. & 3000 F standard Hour allowed. 65ouunit X 2 Hour 13000 Hour

13 fixed oH spending variance : $ 27000 - $25000 B 1400 unfavorable w fixed oH Production volume variance $ 25600 (6500 actual unity 2 Hour.P.UX 2 25600 - 26000 = suoo fov $ 25600 6400x2