Rivian manufactures electric cars. Both variable and fixed overhead are allocated based on direct labor hours....
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Rivian manufactures electric cars. Both variable and fixed overhead are allocated based on direct labor hours. The budgeted manufacturing overhead costs per unit (Car) and based on direct labor hours are shown below: Variable overhead (8 hours @ $42 per direct manufacturing labor hour) Fixed overhead (8 hours @ $75 per direct manufacturing labor hour) Total overhead per unit ● Cost/ Unit $336 600 $936 The following information is available for the current period: ● 12,000 motors were produced. The budget production was 10,000 motors. 101,000 direct manufacturing labor hours were worked at a total direct labor cost of $4,545,000. Actual variable manufacturing overhead costs equaled $4,655,000. Actual fixed manufacturing overhead costs equaled $6,820,000. a. Compute a three-column variance analysis of Rivian's variable manufacturing overhead including variance descriptions. b. Compute a three-column variance analysis of Rivian's fixed manufacturing overhead including variance descriptions. c. Discuss an important insight about Rivian's Fixed Costs and Infrastructure based on the Production Volume Variance and the results of your financial analysis above. Rivian manufactures electric cars. Both variable and fixed overhead are allocated based on direct labor hours. The budgeted manufacturing overhead costs per unit (Car) and based on direct labor hours are shown below: Variable overhead (8 hours @ $42 per direct manufacturing labor hour) Fixed overhead (8 hours @ $75 per direct manufacturing labor hour) Total overhead per unit ● Cost/ Unit $336 600 $936 The following information is available for the current period: ● 12,000 motors were produced. The budget production was 10,000 motors. 101,000 direct manufacturing labor hours were worked at a total direct labor cost of $4,545,000. Actual variable manufacturing overhead costs equaled $4,655,000. Actual fixed manufacturing overhead costs equaled $6,820,000. a. Compute a three-column variance analysis of Rivian's variable manufacturing overhead including variance descriptions. b. Compute a three-column variance analysis of Rivian's fixed manufacturing overhead including variance descriptions. c. Discuss an important insight about Rivian's Fixed Costs and Infrastructure based on the Production Volume Variance and the results of your financial analysis above.
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Expert Answer General Guidance The answer provided below has been developed in a clear step by step manner Step 1 a VARIABLE OVERHEAD VARIANCE ANALYSI... View the full answer
Related Book For
Horngrens Financial and Managerial Accounting
ISBN: 978-0133866292
5th edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura
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