The Boston Bread Company bakes baguettes for distribution to upscale grocery stores. The company has two direct-cost cat
Posted: Wed May 04, 2022 6:40 am
- The Boston Bread Company Bakes Baguettes For Distribution To Upscale Grocery Stores The Company Has Two Direct Cost Cat 1 (18.92 KiB) Viewed 39 times
for 2020 and additional information for the year ended December 31,
2020
- The Boston Bread Company Bakes Baguettes For Distribution To Upscale Grocery Stores The Company Has Two Direct Cost Cat 2 (8.78 KiB) Viewed 39 times
- The Boston Bread Company Bakes Baguettes For Distribution To Upscale Grocery Stores The Company Has Two Direct Cost Cat 3 (12.75 KiB) Viewed 39 times
- The Boston Bread Company Bakes Baguettes For Distribution To Upscale Grocery Stores The Company Has Two Direct Cost Cat 4 (11.89 KiB) Viewed 39 times
Actual costs incurred
Same budgeted lump sum regardless of output
level
Flexible budget
Allocated overhead
Fixed MOH
4 variance analysis
Spending variance
Efficiency variance
Production volume variance
Fixed MOH
Requirement 2
Fixed manufacturing overhead is (over allocated, under
allocated ) by $_____
The Boston Bread Company bakes baguettes for distribution to upscale grocery stores. The company has two direct-cost categories: direct materials and direct manufacturing labor. The Boston Bread Company allocates fixed manufacturing overhead to products on the basis of standard direct manufacturing labor-hours. For 2020, fixed manufacturing overhead was budgeted at $4.00 per direct manufacturing labor-hour. Actual fixed manufacturing overhead incurred during the year was $284,000.
Direct manufacturing labor use Variable manufacturing overhead 0.02 hours per baguette $10.00 per direct manufacturing labor-hour
Planned (budgeted) output Actual production Direct manufacturing labor Actual variable manufacturing overhead $626,940 3,300,000 baguettes 2,700,000 baguettes 48,600 hours
1. Prepare a variance analysis of fixed manufacturing overhead cost. 2. Is fixed overhead underallocated or overallocated? By what amount? 3. Comment on your results. Discuss the variances and explain what may be driving them.