Alden Company uses a two-variance analysis for overhead variances. Practical capacity is defined as 32 setups...

 

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Alden Company uses a two-variance analysis for overhead variances. Practical capacity is defined as 32 setups and 32,000 machine hours to manufacture 6,400 units for the year. Selected data for 2016 follow: Budgeted fixed factory overhead: Setup Other $ 89,600 98,000 $ 187,600 Total factory overhead incurred Variable factory overhead rate: Per setup Per machine hour Total standard machine hours allowed for the units manufactured Machine hours actually worked Actual total number of setups $ 488,000 55 750 8 27,000 hours 31,000 hours 28 2. Assume that the company includes all setup costs as variable factory overhead. The budgeted total fixed overhead, therefore, is $114,000, and the standard variable overhead rate per setup is $3,550. What are the (a) overhead spending, (b) efficiency, and (c) flexible-budget variances for the year? Efficiency variance 35,550 Unfavorable Spending variance Unfavorable $ Flexible-budget variance Unfavorable 3. Assume that the company uses only machine hours as the activity measure to apply both variable and fixed overhead, and that it includes all setup costs as variable factory overhead. What is the (a) overhead spending variance, (b) efficiency variance, and (c) flexible-budget variance for the year? Spending variance Unfavorable Efficiency variance Unfavorable Flexible-budget variance Unfavorable Alden Company uses a two-variance analysis for overhead variances. Practical capacity is defined as 32 setups and 32,000 machine hours to manufacture 6,400 units for the year. Selected data for 2016 follow: Budgeted fixed factory overhead: Setup Other $ 89,600 98,000 $ 187,600 Total factory overhead incurred Variable factory overhead rate: Per setup Per machine hour Total standard machine hours allowed for the units manufactured Machine hours actually worked Actual total number of setups $ 488,000 55 750 8 27,000 hours 31,000 hours 28 2. Assume that the company includes all setup costs as variable factory overhead. The budgeted total fixed overhead, therefore, is $114,000, and the standard variable overhead rate per setup is $3,550. What are the (a) overhead spending, (b) efficiency, and (c) flexible-budget variances for the year? Efficiency variance 35,550 Unfavorable Spending variance Unfavorable $ Flexible-budget variance Unfavorable 3. Assume that the company uses only machine hours as the activity measure to apply both variable and fixed overhead, and that it includes all setup costs as variable factory overhead. What is the (a) overhead spending variance, (b) efficiency variance, and (c) flexible-budget variance for the year? Spending variance Unfavorable Efficiency variance Unfavorable Flexible-budget variance Unfavorable

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To calculate the overhead variances we need the following information Budgeted fixed factory overhea... View the full answer