Refer to the Watermate Data Set above. Requirements 1. Compute the total manufacturing overhead variance. What does
Question:
Requirements
1. Compute the total manufacturing overhead variance. What does this tell management?
2. Compute the overhead flexible budget variance. What does this tell management?
3. Compute the production volume variance. What does this tell management?
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Watermate is a manufacturer of ceramic bottles. The company has these standards: Direct materials (clay Direct labour Static budget variable overhead Static budget fixed overhead Static budget direct labour hours Static budget number of bottles Watermate allocates manufacturing overhead to production based on standard direct labour hours Last month, Watermate reported the following actual results for the production of 70,000 bottles 1 kg per bottle, at a cost of $0.40 per kg 1/5 hour per bottle, at a cost of $14 per hour $70,000 $30,000 10,000 hours ....50,000 Direct labour Actual variable overhead Actual fixed overhead.... 1.1 kg per bottle, at a cost of $0.50 per kg 1/4 hour per bottle, at a cost of $13 per hour $104,000 28,000
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Req 1 Watermate Computation of Total Overhead Variance Total overhead variance Actual overhead cost 104000 var 28000 fixed 132000 Standard overhead al...View the full answer
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Managerial Accounting
ISBN: 978-0176223311
1st Canadian Edition
Authors: Karen Wilken Braun, Wendy Tietz, Walter Harrison, Rhonda Pyp
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