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Ashford Foods processes bags of organic frozen fruits sold at specialty grocery stores (Click the icon to view additional information) Read the requirements Requirement 1. How much variable overhead would have been allocated to production? How much fixed overhead would have been allocated to production? The variable overhead alocated to production is Now determine the fixed overhead allocated to production The fixed overhead allocated to production is Requirement 2. Compute the variable MOH rate variance and the variable MOH efficiency variance. What do these variances managers? Begin by determing the formula for the variable MOH rate variance, then calculate the variable overhead rate variance. (Enter the result as a positive number Enter rates to two decimal places. Label the variance as tavorable (F) or unfavorable()) Variable overhead
I X More info The company allocates manufacturing overhead based on direct labor hours. Ashford has budgeted fixed manufacturing overhead for the year to be $631,000. The predetermined fixed manufacturing overhead rate is $16.80 per direct labor hour, while the standard variable manufacturing overhead rate is $0.95 per direct labor hour. The direct labor standard for each case is one - quarter (0.25) of an hour. The company actually processed 154,000 cases of frozen organic fruits during the year and incurred $684,340 of manufacturing overhead. Of this amount, $630,000 was fixed. The company also incurred a total of 41,800 direct labor hours. Print Done
Requirements 1. How much variable overhead would have been allocated to production? How much fixed overhead would have been allocated to production? 2. Compute the variable MOH rate variance and the variable MOH efficiency variance. What do these variances tell managers? 3. Compute the fixed MOH budget variance and the fixed overhead volume variance. What do these variances tell managers? Print Done X o deci
Requirement 1, How much variable overhead would have been allocated to production? How much fixed overhead would have been allocated to production? The variable overhead allocated to production is Now determine the fixed overhead allocated to production. The fixed overhead allocated to production is Requirement 2. Compute the variable MOH rate variance and the variable MOH efficiency variance. What do these variances tell managers? Begin by determing the formula for the variable MOH rate variance, then calculate the variable overhead rate variance. (Enter the result as a positive number. Enter rates to two decimal places. Label the variance as favorable (F) or unfavorable (U)) Variatie overhead rate variance This variance tells managers that Ashford Foods actually incurred on variable manufacturing overhead than they would have expected given the actual hours used.
Now determine the formula for the variable MOH efficiency variance, then calculate the efficiency variance. (Enter the result as a positive number. Enter any rates to two decimal places Label the variance as favorable (F) or unfavorable (U)) Vanable overhead efficiency variance This vanance tells managers that Ashford Foods used direct labor hours than anticipated for the actual volume of output Requirement 3. Compute the fixed MOH budget variance and the fixed overhead volume variance. What do these variances tell managers? Begin by determing the formula for the fixed MOH budget variance, then calculate the fixed budget variance. (Enter the result as a positive number Label the variance as favorable (F) or untevorable (U)) Fixed MOH budget variance
Requirement 3. Compute the fixed MOH budget variance and the fixed overhead volume variance What do these variances bell managers? Begin by determing the formula for the fixed MOH budget variance, then calculate the fixed budget variance. (Enter the result as a positive number. Label the variance as favorabie (F) or unfavorable (U)) Fixed MOH budget variance This variance tels us that Ashford Foods spent than anticipated on fixed overhead costs Now determine the formula for the fixed overhead volume variance, then calculate the volume variance. (Enter the result as a positive number. Label the variance as favorable (F) or unfavorable (U)) Food MOH volume variance This variance tels managers that Ashford Foods produced cases of frozen organic fruits than originally expected.