8-27 Straightforward 4-variance overhead analysis. The Lopez Company uses standard costing in its manufacturing plant for...

8-27 Straightforward 4-variance overhead analysis. The Lopez Company uses standard costing in its manufacturing plant for auto parts. The standard cost of a particular auto part, based on a denominator level of 4,000 output units per year, included 6 machine-hours of variable manufacturing overhead at $8 per hour and 6 machine-hours of fixed manufacturing overhead at $15 per hour. Actual output produced was 4,400 units. Variable manufacturing overhead incurred was $245,000. Fixed manufacturing overhead incurred was $373,000. Actual machine-hours were 28,400.

Required:

1. Prepare an analysis of all variable manufacturing overhead and fixed manufacturing overhead variances, using the 4-variance analysis in Exhibit 8-4 (page 324).

2. Prepare journal entries using the 4-variance analysis.

3. Describe how individual fixed manufacturing overhead items are controlled from day to day.

4. Discuss possible causes of the fixed manufacturing overhead variances.

plz use computer writing, not hand writing

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Overhead Variances, Four-Variance Analysis Oerstman, Inc., uses a standard costing system and develops its overhead rates...

Overhead Variances, Four-Variance Analysis Oerstman, Inc., uses a standard costing system and develops its overhead rates from the current annual budget. The budget is based on an expected annual output of 124,000 units requiring 496,000 direct labor hours. (Practical capacity is 516,000 hours.) Annual budgeted overhead costs total $818,400, of which $585,280 is fixed overhead. A total of 119,400 units using 494,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $260,600, and...

Overhead Variances, Four-Variance Analysis Oerstman, Inc., uses a standard costing system and develops its overhead rates...

Overhead Variances, Four-Variance Analysis Oerstman, Inc., uses a standard costing system and develops its overhead rates from the current annual budget. The budget is based on an expected annual output of 123,000 units requiring 492,000 direct labor hours. (Practical capacity is 512,000 hours.) Annual budgeted overhead costs total $816,720, of which $585,480 is fixed overhead. A total of 119,500 units using 490,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $261,100, and...

Overhead Variances, Four-Variance Analysis Oerstman, Inc., uses a standard costing system and develops its overhead rates...

Overhead Variances, Four-Variance Analysis Oerstman, Inc., uses a standard costing system and develops its overhead rates from the current annual budget. The budget is based on an expected annual output of 125,000 units requiring 500,000 direct labor hours. (Practical capacity is 520,000 hours.) Annual budgeted overhead costs total $830,000, of which $585,000 is fixed overhead. A total of 119,300 units using 498,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $260,000, and...

Overhead Variances, Four-Variance Analysis Oerstman, Inc., uses a standard costing system and develops its overhead rates...

Overhead Variances, Four-Variance Analysis Oerstman, Inc., uses a standard costing system and develops its overhead rates from the current annual budget. The budget is based on an expected annual output of 130,000 units requiring 520,000 direct labor hours. (Practical capacity is 540,000 hours.) Annual budgeted overhead costs total $842,400, of which $608,400 is fixed overhead. A total of 119,000 units using 518,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $261,900, and...

Overhead Variances, Four-Variance Analysis Oerstman, Inc., uses a standard costing system and develops its overhead rates...

Overhead Variances, Four-Variance Analysis Oerstman, Inc., uses a standard costing system and develops its overhead rates from the current annual budget. The budget is based on an expected annual output of 123,000 units requiring 492,000 direct labor hours. (Practical capacity is 512,000 hours.) Annual budgeted overhead costs total $811,800, of which $580,560 is fixed overhead. A total of 119,200 units using 490,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $260,100, and...

Overhead Variances, Four-Variance Analysis Oerstman, Inc., uses a standard costing system and develops its overhead rates...

Overhead Variances, Four-Variance Analysis Oerstman, Inc., uses a standard costing system and develops its overhead rates from the current annual budget. The budget is based on an expected annual output of 129,000 units requiring 516,000 direct labor hours. (Practical capacity is 536,000 hours.) Annual budgeted overhead costs total $861,720, of which $608,880 is fixed overhead. A total of 119,300 units using 514,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $261,800, and...

Overhead Variances, Four-Variance Analysis Oerstman, Inc., uses a standard costing system and develops its overhead rates...

Overhead Variances, Four-Variance Analysis Oerstman, Inc., uses a standard costing system and develops its overhead rates from the current annual budget. The budget is based on an expected annual output of 129,000 units requiring 516,000 direct labor hours. (Practical capacity is 536,000 hours.) Annual budgeted overhead costs total $861,720, of which $608,880 is fixed overhead. A total of 119,300 units using 514,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $261,800, and...

Overhead Variances, Four-Variance Analysis Oerstman, Inc., uses a standard costing system and develops its overhead rates...

Overhead Variances, Four-Variance Analysis Oerstman, Inc., uses a standard costing system and develops its overhead rates from the current annual budget. The budget is based on an expected annual output of 126,000 units requiring 504,000 direct labor hours. (Practical capacity is 524,000 hours.) Annual budgeted overhead costs total $821,520, of which $594,720 is fixed overhead. A total of 119,300 units using 502,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $260,300, and...

Overhead Variances, Four-Variance Analysis Oerstman, Inc., uses a standard costing system and develops its overhead rates...

Overhead Variances, Four-Variance Analysis Oerstman, Inc., uses a standard costing system and develops its overhead rates from the current annual budget. The budget is based on an expected annual output of 127,000 units requiring 508,000 direct labor hours. (Practical capacity is 528,000 hours.) Annual budgeted overhead costs total $833,120, of which $604,520 is fixed overhead. A total of 119,400 units using 506,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $260,300, and...

Overhead Variances, Four-Variance Analysis Oerstman, Inc., uses a standard costing system and develops its overhead rates...

Overhead Variances, Four-Variance Analysis Oerstman, Inc., uses a standard costing system and develops its overhead rates from the current annual budget. The budget is based on an expected annual output of 130,000 units requiring 520,000 direct labor hours. (Practical capacity is 540,000 hours.) Annual budgeted overhead costs total $837,200, of which $603,200 is fixed overhead. A total of 119,400 units using 518,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $261,200, and...

Subjects