T otal ov erhead, 3- v arian c e ana l ysis. The Olsson-Langkilde Air Force Base has an extensive


Question Description:

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T otal ov erhead, 3- v arian c e ana l ysis. The Olsson-Langkilde Air Force Base has an extensive repair facility for jet engines. It devel- oped standard costing and flexible budgets to account for this activity. Budgeted variable overhead at a level of 8000 standard monthly direct labour-hours was SKr 64 000; budgeted total overhead at 10 000 standard direct labour-hours was SKr 197 600. The standard cost allo- cated to repair output included a total overhead rate of 120% of standard direct labour cost. Total overhead incurred for October was SKr 249 000. Direct labour costs incurred were SKr 202 440. The direct labour price variance was SKr 9640 U. The direct labour flexible-budget variance was SKr 14 440 U. The standard labour price was SKr 16 per hour. The production- volume variance was SKr 14 000 F. Required 1 Calculate the direct labour efficiency variance and the spending, efficiency and produc- tion-volume variances for overhead. Also, calculate the denominator level. 2 Describe how individual variable manufacturing overhead items are controlled from day to day. Also, describe how individual fixed manufacturing overhead items are controlled.

Answer

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