MANAGERIAL ACCT W/ACCESS
17th Edition
ISBN: 9781264274017
Author: Garrison
Publisher: MCG
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Chapter 10.A, Problem 9P
PROBLEM 10A-9 Applying Overhead; Overhead Variances LO10-3, LO10-4
Chdczuk, S.A, of Gdansk Poland, is a major producer of classic Polish sausage. The company uses a
Management would like to determine the cause of the $ 15,400 underapplied overhead.
- Compute the predetermined overhead rate. Break the rate down into variable and fixed cost elements.
- Show how the $272,000 Applied figure in the Manufacturing Overhead account was computed.
- Breakdown the $15,400 underapplied overhead into four components: (1) variable overhead rate variance, (2) variable overhead efficiency variance, (3) fixed overhead
budget variance , and (4) fixed overhead volume variance. - Explain the meaning of each variance that you computed in (3) above.
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Students have asked these similar questions
Problem 10A-9 (Algo) Applying Overhead; Overhead Variances [LO10-3, LO10-4]
Baird Company makes Polish sausage. It applied manufacturing overhead to production based on standard direct labor-hours.
According to the company's planning budget, the following manufacturing overhead costs should be incurred at an activity level of
30,000 labor-hours (the denominator activity level):
Variable manufacturing overhead cost
Fixed manufacturing overhead cost
Total manufacturing overhead cost
During the most recent year, the following operating results were recorded:
Activity:
Actual labor-hours worked
Standard labor-hours allowed for the actual output
Actual
Cost:
Actual variable manufacturing overhead cost incurred
Actual fixed manufacturing overhead cost incurred
At the end of the year, the company's Manufacturing Overhead account contained the following data:
Manufacturing Overhead
409,800 Applied
31,800
Debit
$ 172,500
232,500
$ 405,000
Credit
27,000
28,000
378,000
$ 199,800
$ 210,000…
Example-2Variable 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 baguetteVariable manufacturing overhead $10.00 per direct manufacturing labor-hourThe Sourdough Bread Company provides the following additional data for the year ended December 31, 2017:Required:Planned (budgeted) outputActual productionDirect manufacturing laborActual variable manufacturing overhead3,100,000 baguettes 2,600,000 baguettes 46,800 hours$617,7601. 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.…
3. Fixed manufacturing overhead variance analysis (Continuation of #2 above)
The Sourdough Bread Company bakes baquettes 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
Variable manufacturing overhead $10.00 per direct manufacturing labor-hour
0.02 hours per baguette
The Sourdough Bread Company also allocates fixed manufacturing overhead to products on the
basis of standard direct manufacturing labor-hours. For 2021, fixed manufacturing overhead was
budgeted at $3.00 per direct manufacturing labor-hour. Actual fixed manufacturing overhead
incurred during the year was $284,000.
The Sourdough Bread Company provides the following additional data for the
December 31, 2021:
year ended
Planned…
Chapter 10 Solutions
MANAGERIAL ACCT W/ACCESS
Ch. 10.A - EXERCISE 10A-1 Fixed Overhead Variances LO10-4...Ch. 10.A - EXERCISE 10A-2 Predetermined Overhead Rate;...Ch. 10.A - Prob. 3ECh. 10.A - EXERCISE 10A-4 Fixed Overhead Variances LO10-4...Ch. 10.A - EXERCISE 10A5 Using Fixed Overhead Variances LO104...Ch. 10.A - EXERCISE 10A-6 Predetermined Overhead Rate LO10-4...Ch. 10.A - EXERCISE 10A-7 Relations Among Fixed Overhead...Ch. 10.A - Prob. 8PCh. 10.A - PROBLEM 10A-9 Applying Overhead; Overhead...Ch. 10.A - PROBLEM 10A-10 Comprehensive Standard Cost...
Ch. 10.A -
PROBLEM 10A-11 Comprehensive Standard Cost...Ch. 10.A - Prob. 12PCh. 10.B - EXERCISE 10B-1 Standard Cost Flows; Income...Ch. 10.B - Prob. 2ECh. 10.B - Prob. 3ECh. 10.B - Prob. 4ECh. 10.B - Prob. 5PCh. 10.B - Prob. 6PCh. 10 - Prob. 1QCh. 10 - Why are separate price and quantity variances...Ch. 10 - 10-3 Who is generally responsible for the...Ch. 10 - The materials price variance can be computed at...Ch. 10 - 10-5 If the materials price variance is favorable...Ch. 10 - Prob. 6QCh. 10 - Prob. 7QCh. 10 - 10-8 What effect, if any, would you expect...Ch. 10 - 10-9 If variable manufacturing overhead is applied...Ch. 10 - 10-10 Why can undue emphasis on labor efficiency...Ch. 10 -
The Excel worksheet form that appears below is to...Ch. 10 - Prob. 2AECh. 10 - Prob. 1F15Ch. 10 - Prob. 2F15Ch. 10 - Prob. 3F15Ch. 10 - Prob. 4F15Ch. 10 - Prob. 5F15Ch. 10 - Prob. 6F15Ch. 10 - Prob. 7F15Ch. 10 - Prob. 8F15Ch. 10 - Prob. 9F15Ch. 10 - Preble Company manufactures one product. Its...Ch. 10 - Prob. 11F15Ch. 10 - Prob. 12F15Ch. 10 - Prob. 13F15Ch. 10 - Prob. 14F15Ch. 10 - Prob. 15F15Ch. 10 - EXERCISE 10-1 Direct Materials Variances LO10-1...Ch. 10 -
EXERCISE 10-2 Direct Labor Variances...Ch. 10 -
EXERCISE 10–3 Variable Overhead Variances...Ch. 10 - EXERCISE 10-4 Direct Labor and Variable...Ch. 10 -
EXERCISE 10-5 Working Backwards from Labor...Ch. 10 - EXERCISE 10-6 Direct Materials and Direct Labor...Ch. 10 - EXERCISE 10-7 Direct Materials Variances LOIO-1...Ch. 10 -
EXERCISE 10-8 Direct Materials and Direct Labor...Ch. 10 -
PROBLEM 10-9 Comprehensive Variance Analysis...Ch. 10 -
PROBLEM 10-10 Multiple Products, Materials, and...Ch. 10 - PROBLEM 10-11 Direct Materials and Direct Labor...Ch. 10 - PROBLEM 10-12 Variance Analysis in a...Ch. 10 - Prob. 13PCh. 10 - Prob. 14PCh. 10 - PROBLEM 10-15 Comprehensive Variance Analysis...Ch. 10 - Prob. 16PCh. 10 - Prob. 17C
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