ComplexChem, Inc., produces chemicals for large biotechRequirement companies. It

Question

ComplexChem, Inc., produces chemicals for large biotechRequirement companies. It has the following data for manufacturing overhead costs during August 2017 Fill in the blanks. Use F for favorable and U for unfavorable: (Click the icon to view the table.) VariableFixed Actual costs incurred Costs allocated to products Flexible budget Actual input x budgeted rate $30,500 $17,000 28,000 14,200 15.400 31,200 (If no variance exists leave the dollar value blank. Label the variance as favorable (F), unfavorable (U) or never a variance Variable Fixed (1) Spending variance (2) Efficiency variance (3) Production-volume variance 4) Flexible-budget variance (5) Underallocated (overallocated) manufacturing overhead

Explanation / Answer

45

actual input quantity×

Budgeted rate

Flexible budget:

Budgeted

input

quantity allowed

For

actual

output × budgeted rate

Allocated:

Budgeted input quantity allowed for actual output×budgeted rate

700 F

Spending variance

3200 U

Efficiency variance

Never

Production volume variance

2500 U

Flexible budget variance

$2,500 U

Under allocated variable overhead (total variable overhead variance)

  

Same Budgeted lump sum (as in static budget)

Regardless of output level

Flexible budget:

Same Budgeted

Lump sum(as in static budget) regardless of output level

Allocated:

Budgeted input quantity allowed for actual output×budgeted rate

1600 U

Spending variance

Never

Efficiency variance

1800 U

Production volume variance

1600 U

Flexible budget variance

1800 U

Production volume variance

$3,400 U

Under allocated fixed overhead (total fixed overhead variance)

Actual cost incurred

actual input quantity×

Budgeted rate

Flexible budget:

Budgeted

input

quantity allowed

For

actual

output × budgeted rate

Allocated:

Budgeted input quantity allowed for actual output×budgeted rate

Variable MOH 30,500 31,200 28,000 28,000

700 F

Spending variance

3200 U

Efficiency variance

Never

Production volume variance

2500 U

Flexible budget variance

Never

$2,500 U

Under allocated variable overhead (total variable overhead variance)

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