Flexible Budgets, Overhead Cost Variances, and Management Control Fixed manufacturing overhead variance analysis The Sourdough Bread Company bakes baguettes for distribution to upscale grocery stores. The company has two direct-cost categories: direct materials and direct manufacturing labor. The Sourdough Bread Company allocates fixed manufacturing overhead to products on the basis of standard direct manufacturing labor-hours. The following is some budget data for the Sourdough Bread Company for 2017. Direct manufacturing labor use 0.02 hours per baguette Fixed manufacturing overhead $3.00 per direct manufacturing labor-hour The following is additional information for the Sourdough Bread Company for the year ended December 31, 2017: Planned (budgeted) output 3,100,000 baguettes Actual production 2,600,000 baguettes Budgeted direct manufacturing labor 62,000 hours Actual direct manufacturing labor 46,800 hours Actual fixed manufacturing overhead $294,000 Use the blue shaded areas on the ENTERANSWERS tab for inputs. Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instructions tab you will be marked wrong. Requirements 1 Prepare a variance analysis of fixed manufacturing overhead cost. Use the exhibit that shows the variance analysis of fixed manufacturing overhead cost as a guide. a. For variances with a zero amount, leave the box empty; do not select a label or enter a zero. b. Use the ABS function when calculating variances, and use the drop-down selections for F or U when describing the variances. 2 Is fixed overhead underallocated or overallocated? By what amount? a. Use the ABS function when calculating the underallocated or overallocated amount.)

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter10: Standard Costing And Variance Analysis

Section: Chapter Questions

Problem 47E: Refer to the information for Cinturon Corporation on the previous page. Required: 1. Break down the...

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Flexible Budgets, Overhead Cost Variances, and Management Control
Fixed manufacturing overhead variance analysis

The Sourdough Bread Company bakes baguettes for distribution to upscale grocery stores. The company has two direct-cost categories: direct materials and direct manufacturing labor. The Sourdough Bread Company allocates fixed manufacturing overhead to products on the basis of standard direct manufacturing labor-hours. The following is some budget data for the Sourdough Bread Company for 2017.
		Direct manufacturing labor use	0.02	hours per baguette
		Fixed manufacturing overhead	$3.00	per direct manufacturing labor-hour

The following is additional information for the Sourdough Bread Company for the year ended December 31, 2017:
		Planned (budgeted) output	3,100,000	baguettes
		Actual production	2,600,000	baguettes
		Budgeted direct manufacturing labor	62,000	hours
		Actual direct manufacturing labor	46,800	hours
		Actual fixed manufacturing overhead	$294,000

Use the blue shaded areas on the ENTERANSWERS tab for inputs.
Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instructions tab you will be marked wrong.

Requirements
1	Prepare a variance analysis of fixed manufacturing overhead cost. Use the exhibit that shows the variance analysis of fixed manufacturing overhead cost as a guide.
	a.	For variances with a zero amount, leave the box empty; do not select a label or enter a zero.
	b.	Use the ABS function when calculating variances, and use the drop-down selections for F or U when describing the variances.
2	Is fixed overhead underallocated or overallocated? By what amount?
	a.	Use the ABS function when calculating the underallocated or overallocated amount.)

1. Prepare a variance analysis of fixed manufacturing overhead cost. Use the exhibit that shows the variance analysis of fixed
manufacturing overhead cost as a guide.
a. For variances with a zero amount, leave the box empty; do not select a label or enter a zero.
b. Use the ABS function when calculating variances, and use the drop-down selections for F or U when describing the variances.
(Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instructions tab you will be marked
wrong.)
Same Budgeted
Lump Sum
Actual Costs
Regardless of
Allocated
Incurred
Output Level
Flexible Budget
Overhead
Spending variance
Efficiency variance
Production-volume
variance
2. Is fixed overhead underallocated or overallocated? By what amount?
a. Use the ABS function when calculating the underallocated or overallocated amount.
(Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instructions tab you will be marked
wrong.)
Fixed manufacturing overhead is
by

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