Bramble Company manufactures deep-sea fishing rods, which it distributes internationally through a chain of wholesalers. The following data are taken from the budget prepared at the beginning of the year by Bramble's controller. The company applies overhead on the basis of machine hours. Variable manufacturing overhead Fixed manufacturing overhead Direct labor hours Machine hours Variable overhead spending variance Annual Budget $2,062,400 $1,202,280 Variable overhead efficiency variance During the month of May, Bramble used 4,350 direct labor hours and 21,890 machine hours. The flexible budget for the month allowed 4.450 direct labor hours and 21,200 machine hours. Actual fixed manufacturing overhead incurred was $109,400; variable manufacturing overhead incurred was $173,320. Fixed overhead spending variance (a) Calculate the variable overhead spending and efficiency variances for May. (Round per unit value to 2 decimal places, e.g. 52.75 and final answers to 0 decimal places, e.g. 5,725. If variance is zero, select "Not Applicable" and enter O for the amounts) eTextbook and Media 49,200 257,800 $ $ May Budget $173,600 $100,190 $ 4,100 21,700 (b) Calculate the fixed overhead spending variance for May. (If variance is zero, select "Not Applicable and enter O for the amounts)
Bramble Company manufactures deep-sea fishing rods, which it distributes internationally through a chain of wholesalers. The following data are taken from the budget prepared at the beginning of the year by Bramble's controller. The company applies overhead on the basis of machine hours. Variable manufacturing overhead Fixed manufacturing overhead Direct labor hours Machine hours Variable overhead spending variance Annual Budget $2,062,400 $1,202,280 Variable overhead efficiency variance During the month of May, Bramble used 4,350 direct labor hours and 21,890 machine hours. The flexible budget for the month allowed 4.450 direct labor hours and 21,200 machine hours. Actual fixed manufacturing overhead incurred was $109,400; variable manufacturing overhead incurred was $173,320. Fixed overhead spending variance (a) Calculate the variable overhead spending and efficiency variances for May. (Round per unit value to 2 decimal places, e.g. 52.75 and final answers to 0 decimal places, e.g. 5,725. If variance is zero, select "Not Applicable" and enter O for the amounts) eTextbook and Media 49,200 257,800 $ $ May Budget $173,600 $100,190 $ 4,100 21,700 (b) Calculate the fixed overhead spending variance for May. (If variance is zero, select "Not Applicable and enter O for the amounts)
Chapter1: Financial Statements And Business Decisions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:**Bramble Company Overhead Analysis: May Budget**
**Overview:**
Bramble Company manufactures deep-sea fishing rods distributed internationally through wholesalers. Overhead is applied based on machine hours. Below is the budgeted versus actual overhead data for May:
**Budget Details:**
| Description | Annual Budget | May Budget |
|------------------------------------|---------------|------------|
| Variable Manufacturing Overhead | $2,062,400 | $173,600 |
| Fixed Manufacturing Overhead | $1,202,280 | $100,190 |
| Direct Labor Hours | 49,200 | 4,100 |
| Machine Hours | 257,800 | 21,700 |
**Actual Usage in May:**
- Direct Labor Hours Used: 4,350
- Machine Hours Used: 21,890
- Flexible Budget Allowed for May: 4,450 direct labor hours and 21,200 machine hours
- Actual Fixed Manufacturing Overhead: $109,400
- Actual Variable Manufacturing Overhead: $173,320
**Calculations Needed:**
(a) **Variable Overhead Variances for May:**
- **Spending Variance**
- **Efficiency Variance**
_(Round per unit value to 2 decimal places. Enter final answers to 0 decimal places. If variance is zero, select "Not Applicable" and enter 0 for the amounts.)_
(b) **Fixed Overhead Spending Variance for May:**
_(If variance is zero, select "Not Applicable" and enter 0 for the amount.)_
---
Use this data to analyze the overhead variances and assess the efficiency of production in relation to budget projections.
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