The following partial information is contained in the variance analysis received from the Western Plant of Eastlawn Company. All plants at Eastlawn apply overhead on the basis of direct labor-hoursFlexible budget for variable overhead based on 3,640 direct labor-hoursActual total overhead incurredActual direct labor-hours workedDirect labor-hours used to determined the fixed overhead application ratePrice variance for variable overhead Price variance for fixed overheadRequired:a. Prepare a variable overhead analysis.b. Prepare a fixed overhead analysis.$ 101,920510,3003,7723,390$ 7,150 F$ 11,814 UComplete this question by entering your answers in the tabs below.Required ARequired BPrepare a fixed overhead analysis.Note: Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.Price variance11,814 บีProduction volume varianceFFixed overhead total varianceF The following partial information is contained in the variance analysis received from the Western Plant of Eastlawn Company. All plants at Eastlawn apply overhead on the basis of direct labor-hours.- **Flexible budget for variable overhead based on 3,640 direct labor-hours:** $101,920- **Actual total overhead incurred:** $510,300- **Actual direct labor-hours worked:** 3,772- **Direct labor-hours used to determine the fixed overhead application rate:** 3,390- **Price variance for variable overhead:** $7,150 F (Favorable)- **Price variance for fixed overhead:** $11,814 U (Unfavorable)**Required:**a. Prepare a variable overhead analysis.b. Prepare a fixed overhead analysis.**Instructions:**- Complete this question by entering your answers in the tabs below.**Prepare a fixed overhead analysis.**- Note: Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.| Price variance | $11,814 | U ||-------------------------------|---------|---|| Production volume variance | | F || Fixed overhead total variance | | F |

Name: The following partial information is contained in the variance analysi
Uploaded: 2024-03-20T06:33:06.000Z
Channel: Bartleby
Description: The following partial information is contained in the variance analysis received from the Western Plant of Eastlawn Company. All plants at Eastlawn apply overhead on the basis of direct labor-hoursFlexible budget for variable overhead based on 3,640

Variable overhead variance is the difference between actual variable overhead incurred and the the budgeted variable overhead that was planned under the given level of activity. It consists of two parts - Variable overhead spending (price) variance and Variable overhead efficiency variance.Calculating standard variable overhead rate per hour as follows:Standard variable overhead rate per hour = Flexible budget variable overhead/ Budgeted direct labour hours= $101920/3640 = $28 per direct labour hourNow, calculating the Variable overhead efficiency variance:Variable overhead efficiency variance = (Actual direct labour hours - Budgeted direct labour hours) * Standard rate per hour= (3772 - 3640) * $28 = $3696 UnfavourableSince, Actual hours worked is greater than standard hours that should have been worked for given level of activities, the variance is unfavorable.Calculating the Variable overhead total variance as follows:Variable overhead total variance = Variable overhead price variance + Variable overhead efficiency variance= -7150 + 3696 = $3454 FavourableIn order to determine Actual fixed overhead incurred, first determine actual variable overhead incurred as follows:Actual variable overhead cost incurred = Flexible budget variable overhead - Favourable variable overhead variance= $101920 - $3454 = $98466Since, Variable overhead total variance is favorable, it implies that actual overhead is less than budgeted overhead. Hence, it has been deducted.Actual fixed overhead total variance = Total overhead variance - Total variable overhead variance= $510300 - $98466 = $411834Budgeted fixed overhead = Actual fixed overhead costs incurred - Unfavourable fixed overhead price variance= $411834 - $11814 = $400,020Since, Fixed overhead price variance is unfavorable it implies that actual fixed overhead is more than budgeted fixed overhead.Fixed overhead application rate per hour = Budgeted fixed overhead/ Standard direct labour hours= $400,020/3390= $118 per hourFixed overhead production volume variance = Budgeted fixed overhead - (Flexible budget direct labour hours * Fixed overhead application rate)= $400,020 - (3640*$118)= $400,020 - $429,520 = $29500 FavourableSince, Actual production is greater than budgeted, the variance is favorable.Fixed overhead total variance = Fixed overhead price variance + Fixed overhead production volume variance= 11814 - 29500 = $17686Hence, in order to summarize the final answers are as follows:a)Variable overhead price variance = $ 7,150 FVariable overhead Efficiency Variance = $ 3,696 U (refer step 2)Variable overhead total variance = $ 3,454 (Refer step 3)b)Fixed overhead price Variance = $ 11,814 UFixed overhead efficiency Variance = $ 29,500 F ( Refer step 6)Fixed overhead total variance = $ 17,686 F (Refer step 6)