Question

Question Help The Principles Corporation is a manufacturer of centrifuges. Fixed and variable manufacturing overheads are allocated to each centrifuge using budgeted assembly hours, Budgeted assembly time is 2 hours per unit. The following table shows the budgeted amounts and actual results related to overhead for June 2017 (Click the icon to view the table.) Read the requirements Requirement 1. Prepare an analysis of all variable manufacturing overhead and fixed manufacturing overhead variances Begin by calculating the following amounts for the variable overhead Actual Input Actual Costs X Flexible Allocated Incurred Budgeted Rate Budget Overhead Variable OH

Answer 1

Answer Page: No @ is dat Vouliable manubacaring wow mW su manufac wung UA Overhead Variance ли, ел Actual flexible budget static budget Output unit (lorof assembled unit) 235 235 | 130 Howrs of assembly dime 382 2342 = 440 13042 = 260 Assembly hours lunit het alia variable manufacturing over - head corf Ihr of assembly time 282 Variable mfg.overhead conto 9438 470832 = 15040 260432 = 8320 fixed mig overhead costo 13880 18980 12480 fixed mig oH costa lor eforening in 30 49.22 260 = 48 9438 - 33.47 470X3215040 260732 = 8320 12480 12480 = 48 Variable manutacturing overhead spending vanianie . : =.9438 – (280X32) 1.= $414 U etticiency variance = (2828.3.2) – 13880 = $4856F

Page No ③ fixed manufacturing overhead spending variance = 13880 – 10480 = $1400F Production volume variance = |2480 - (470X48) = $10080 u Spending efficiency | Production volume Variance veovlance Variance 4140 4856 F Never a variance Variable manufac -turing overhead fixed manufacturing 1400 F Never a variance 10080 V . overhead @ Jewel entries no Acount title @ Variable manubacturing overhead cost S.NO Debit Credit $9438 cont of 77438 $9438 skcounts payable contiel & Various other account of 13880 work in process control Variable manufacturing overhead allocated $13880

Page No ③ SINO | Credit $ 9438 $ 4856 & 414 $4442 fixed $13880 Account title Debit variable manufacturing overhead allocated $13880 Vericable manubaduring overhead spending variouse $ 414 variable manubacturing overhead contiel vauwable marubacturing overhead efficiency variance @ variable manufacturing overhead elbicieny variante €4856 Variable manufacturing overhead spending rumiance .. Cont of goods sold ** fixed marutacturing overhead cost contief $ 13880 Salaries payable, Account depreciation , other acounts - coort in process control (420 x 48) $22560 fined manutochüring overhead allocated a © fixed manufacturing overhead allocated $22560 tried manutacturing overhead spending vocularse $ 1400 fixed moka on production volume variance fixed manutaduring overhead cont of fired manutachuning overhead production volume $10080 fred manufacturing overhead spending variance - cost of goods sold $22560 $10080 $13880 variance to $1400 $ 86801

Page. No 4 By the planning and control of variable manubadūning overhead costs, both long run and shoot onun bocuses are emphasized where as planning & control of fixed manutacturing Overhead costs. emphasizes mcũnly on the long orun to Planning and control of variable manufacturin overhead costs firstly endentahes. value added overhead activities and then also manages cost drivers related to those activities efficiently The planning & control of fired mopubacturing overhead costs manages only value added activities sielated to budgeted level of output.