Alma, Inc., manufactures high-pressure cleaners for large transportation companies. It uses standard costing and allocates variable and fixed manufacturing overhead based on machine-hours. For each independent scenario given, indicate whether each of the manufacturing variances will be favorable or unfavorable or, in case of insufficient information, indicate “CBD” (cannot be determined).

Transcribed Image Text:

Scenario Production output is 6% less than budgeted, and actual fixed manufactur- ing overhead costs are 5% more than budgeted Production output is 13% less than bud- geted; actual machine-hours are 7% more than budgeted Production output is 10% more than budgeted Actual machine-hours are 20% less than flexible-budget machine-hours Relative to the flexible budget, actual machine-hours are 15% less, and actual variable manufacturing overhead costs are 20% greater Fixed Variance Variable Variable Fixed Overhead Overhead Overhead Overhead Production- Spending Efficiency Spending Volume Variance Variance Variance