Solutionshca14_SM_CH08ADJUSTED - 8-16(20 min Variable...

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8-16 (20 min.) Variable manufacturing overhead, variance analysis. 1. Variable Manufacturing Overhead Variance Analysis for Esquire Clothing for June 2012 Actual Costs Incurred Actual Input Quantity × Actual Rate (1) Actual Input Quantity × Budgeted Rate (2) Flexible Budget: Budgeted Input Quantity Allowed for Actual Output × Budgeted Rate (3) Allocated: Budgeted Input Quantity Allowed for Actual Output × Budgeted Rate (4) (4,536 × $11.50) $52,164 (4,536 × $12) $54,432 (4 × 1,080 × $12) $51,840 (4 × 1,080 × $12) $51,840 2. Esquire had a favorable spending variance of $2,268 because the actual variable overhead rate was $11.50 per direct manufacturing labor-hour versus $12 budgeted. It had an unfavorable efficiency variance of $2,592 U because each suit averaged 4.2 labor-hours (4,536 hours ÷ 1,080 suits) versus 4.0 budgeted labor-hours. 8-1 $2,268 F Spending variance $2,592 U Efficiency variance Never a variance $324 U Flexible-budget variance Never a variance
8-17 (20 min.) Fixed-manufacturing overhead, variance analysis (continuation of 8-16).
8-2
8-18 (30 min.) Variable manufacturing overhead variance analysis. 1. Denominator level = (3,200,000 × 0.02 hours) = 64,000 hours 2. Actual Results Flexible Budget Amounts 1. Output units (baguettes) 2,800,000 2,800,000 2. Direct manufacturing labor-hours 50,400 56,000 a 3. Labor-hours per output unit (2 ÷ 1) 0.018 0.020 4. Variable manuf. overhead (MOH) costs $680,400 $560,000 5. Variable MOH per labor-hour (4 ÷ 2) $13.50 $10 6. Variable MOH per output unit (4 ÷ 1) $0.243 $0.200 a 2,800,000 × 0.020= 56,000 hours Variable Manufacturing Overhead Variance Analysis for French Bread Company for 2012 Actual Costs Incurred Actual Input Quantity × Actual Rate (1) Actual Input Quantity × Budgeted Rate (2) Flexible Budget: Budgeted Input Quantity Allowed for Actual Output × Budgeted Rate (3) Allocated: Budgeted Input Quantity Allowed for Actual Output × Budgeted Rate (4) (50,400 × $13.50) $680,400 (50,400 × $10) $504,000 (56,000 × $10) $560,000 (56,000 × $10) $560,000 3.

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