Alden Company uses a two-variance analysis for overhead variances. Practical cap

Question

Alden Company uses a two-variance analysis for overhead variances. Practical capacity is defined as 36 setups and 36,000 machine hours to manufacture 7,200 units for the year. Selected data for 2016 follow:

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

Assume that the company includes all setup costs as variable factory overhead. The budgeted total fixed overhead, therefore, is $165,000, and the standard variable overhead rate per setup is $3,250. What are the (a) overhead spending, (b) efficiency, and (c) flexible-budget variances for the year?

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?

I ONLY NEED THE TWO ABOVE MISSING VALUES FROM ANSWER 3. I ALREADY GOT THE 1 & 2. THANK YOU SO MUCH!

Alden Company uses a two-variance analysis for overhead variances. Practical capacity is defined as 36 setups and 36,000 machine hours to manufacture 7,200 units for the year. Selected data for 2016 follow:

Required 1. Compute (a) the t overhead flexible-budget variance for 2016 Spending variance Efficiency variance 25,600 Unfavorables 26,600Unfavorable Flexible-budget variance 2,200 Unfavorable

Explanation / Answer

a)Standard MH per unit=36000/7200=5
No of units manufactured= Std allowed MH/std MH per unit
=28000/5=5600

Budgeted no of units per setup= units/no of set up
=7200/36=200 units/setup

Std no of setups for units manufactured
=5600/200=28

Spending variance=variable Overhead+Fixed overhead- actualoverhead
VOH=(32*650)+(32000*6)
Fixed OH=247600
actual overhead=486,000

=[(32*650)+(32000*6)+247600)]-486000
=460,400-48600
=25600 unfavourable

Efficency variance=[(28*650)+(28000*6)+(247600)]-460400
=433800-460400
=26,600U

Flexible budget variance= Spending variance+Efficencyvariance
=25600+26600=52,200 U

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