Flexible Budgets, Overhead Cost Variances, and Management Control Variable 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. Variable manufacturing overhead is allocated to products on the basis of standard direct manufacturing labor-hours. Following is some budget data for the Sourdough Bread Company: Direct manufacturing labor use 0.02 hours per baguette Variable manufacturing overhead $10.00 per direct manufacturing labor-hour The Sourdough Bread Company provides the following additional data for the year ended December 31, 2017: Planned (budgeted) output 3,100,000 baguettes Actual production 2,600,000 baguettes Direct manufacturing labor 46,800 hours Actual variable manufacturing overhead $617,760 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 What is the denominator level used for allocating variable manufacturing overhead? (That is, for how many direct manufacturing labor-hours is Sourdough Bread budgeting?) 2 Prepare a variance analysis of variable manufacturing overhead. a. Use the ABS function when calculating variances, and use the drop-down selections for F (favorable) or U (unfavorable) when describing the variances.

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Description: Flexible Budgets, Overhead Cost Variances, and Management Control Variable Manufacturing Overhead Variance Analysis The Sourdough Bread Company bakes baguettes for distribution to upscale grocery stores. The company has two direct-cost categor

Managerial Accounting: The Cornerstone of Business Decision-Making

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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

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Problem 46E: 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
Variable 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. Variable manufacturing overhead is allocated to products on the basis of standard direct manufacturing labor-hours. Following is some budget data for the Sourdough Bread Company:

		Direct manufacturing labor use	0.02	hours per baguette
		Variable manufacturing overhead	$10.00	per direct manufacturing labor-hour

The Sourdough Bread Company provides the following additional data for the year ended December 31, 2017:

		Planned (budgeted) output	3,100,000	baguettes
		Actual production	2,600,000	baguettes
		Direct manufacturing labor	46,800	hours
		Actual variable manufacturing overhead	$617,760

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	What is the denominator level used for allocating variable manufacturing overhead? (That is, for how many direct manufacturing labor-hours is Sourdough Bread budgeting?)
2	Prepare a variance analysis of variable manufacturing overhead.
	a.	Use the ABS function when calculating variances, and use the drop-down selections for F (favorable) or U (unfavorable) when describing the variances.

1. What is the denominator level used for allocating variable manufacturing overhead?
(That is, for how many direct manufacturing labor-hours is Sourdough Bread budgeting?)
(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.)
Ihours
2. Prepare a variance analysis of variable manufacturing overhead.
(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. Use cell references from prior
calculations, if applicable.)
Flexible Budget:
Allocated: Budgeted
Budgeted Input
Actual Input Quantity Allowed for Allowed for Actual
Actual Output x
Input Quantity
Actual Costs Incurred:
Actual Input Quantity x
Quantity x
Output x Budgeted
Actual Rate
Budgeted Rate
Budgeted Rate
Rate
Spending variance
Efficiency variance
Flexible-budget variance
INSTRUCTIONS
ENTERANSWERS

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