Alden Company uses a two-variance analysis for overhead variances.Practical capacity is defined as 28 setups and 28,000 machine hours to make 5,600 units per year.The data selected for 2016 are the following: Budgeted Fixed Factory Overhead: Setting $ 61,600 Other 148.000 ps 209,600 Total factory overhead incurred ps 482,000 Variable Factory Overhead Rate: by configuration ps 450 per hour machine

Sep 8, 2023

Alden Company uses a two-variance analysis for overhead variances. Practical capacity is defined as 28 setups and 28,000 machine hours to make 5,600 units per year. The data selected for 2016 are the following:

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Alden Company uses a two-variance analysis for overhead variances.Practical capacity is defined as 28 setups and 28,000 machine hours to make 5,600 units per year.The data selected for 2016 are the following: Budgeted Fixed Factory Overhead: Setting $ 61,600 Other 148.000 ps 209,600 Total factory overhead incurred ps 482,000 Variable Factory Overhead Rate: by configuration ps 450 per hour machine
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Budgeted Fixed Factory Overhead:
Setting $ 61,600
Other 148.000
ps 209,600
Total factory overhead incurred ps 482,000
Variable Factory Overhead Rate:
by configuration ps 450
per hour machine ps 7
Total standard machine hours allowed for units manufactured 31,000 hours
Machine hours actually worked 34,000 hours
Actual total number of configurations 24
Required:
1.

Compute (a) the total overhead variance, (b) the overall efficiency variance, and (c) the total flexible budget variance for 2016.

2.

Assume that the company includes all installation costs as variable factory overhead. Therefore, the total budgeted fixed overhead is $148,000 and the standard variable overhead rate per configuration is $2,650. What are (a) overhead, (b) efficiency, and (c) variances? of the flexible budget for the year?

3.

Assume that the company uses only machine hours as the activity measure to apply variable and fixed overhead, and that it includes all installation costs as variable factory overhead. What is (a) the overhead variance, (b) the efficiency variance, and (c) the flexible budget variance for the year?

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