Artco manufactures fiberglass home and office planters in a variety of decorator colors. These planters, in three sizes, are used to hold indoor plants. Overhead is allocated based on the standard pounds of fiberglass per planter. Here are standards for the three planters:
Required:
a. Calculate the total variance (over/underabsorbed) if standard pounds are used to assign overhead to products.
b. Calculate the total overhead variance (over/underabsorbed) if actual pounds are used to assign overhead to products.
c. Explain why the answers differ in parts (a) and (b).
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