Different management levels in Echuca Pty Ltd require varying degrees of managerial accounting information. Because of the need to comply with the managers’ requests, four different variances for manufacturing overhead are computed each month. The information for the September overhead expenditures is as follows:
Budgeted output units6400units
Budgeted fixed manufacturing overhead$40 000
Budgeted variable manufacturing overhead$10per direct labour hour
Budgeted direct manufacturing labour hours1hour per unit
Fixed manufacturing costs incurred$52 000
Direct manufacturing labour hours used7200
Variable manufacturing costs incurred$71 200
Actual units manufactured6800
Required:
a.Compute a 4-variance analysis for the plant controller.
b.Compute a 3-variance analysis for the plant manager.
c.Compute a 2-variance analysis for the corporate controller.
d.Compute the flexible-budget variance for the manufacturing vice CEO.
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