Fifth edition Alnoor Bhimani Charles T. Horngren Srikant M. Datar Madhav V. Rajan Farah Ahamed



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solutions-manual-to-bhimani-et-al-management-and-cost-accounting-pearson-2012-1
Solutions to exercises
16.12 Fixed manufacturing overhead, variance analysis.
(20 min)
1
Budgeted fixed overhead rate per unit of allocation base =
SFr62,400 1,040 4
×
[AQ15]

=
62,400 4,160

= SFr 15 per hour




Actual costs incurred


Same lump sum
regardless of
output level


Same lump sum
regardless of
output level
Allocated
(Budgeted input
allowed for actual
output achieved
× Budgeted rate)
SFr 63,916
SFr 62,400
SFr 62,400
(4 × 1,080 × SFr 15)
SFr 64,800

SFr 1,516 U

SFr 2,400 F

Spending variance
Never a variance
Production-volume variance

SFr 1,516 U
SFr 2,400 F

Flexible-budget variance
Production-volume variance
The fixed manufacturing overhead spending variance and the fixed manufacturing overhead variance are the same – SFr 1,516 U. Lavertezzo spent SFr 1,516 above the
SFr 62,400 budget amount for June 2011.
2
The production volume variance is SFr 2,400 F. This arises because the actual production of 1,080 suits exceeds the budgeted 1,040 suits. This results in overallocated fixed manufacturing overhead of SFr 2,400 (4
×
40
×
SFr 15).
1,040
×
4 = 4,160


Bhimani, Horngren, Datar and Rajan, Management and Cost Accounting, 5
th
Edition, Instructor’s Manual
© Pearson Education Limited 2012

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