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2) Different management levels in Bates, Inc., 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 units 6,400 units

Budgeted fixed manufacturing overhead $25,600

Budgeted variable manufacturing overhead $3 per direct labor hour

Budgeted direct manufacturing labor hours 2 hours per unit

Fixed manufacturing costs incurred $27,000

Direct manufacturing labor hours used 12,000

Variable manufacturing costs incurred $35,600

Actual units manufactured 6,500

Required: Compute a 4-variance analysis for the plant controller.

	Actual Results	Spending Variance	Actual Input Qty. * Budgeted Rate	Efficiency Variance	Flexible Budget Budgeted Input Qty. for Allowed Output* Budgeted Rate	Production Variance	Allocated: Budgeted Input Qty. Allowed for Actual Output * Budgeted Rate
Units
Actual or Budgeted Input Qty.
Variable Overhead						Never a Variance
Fixed Overhead				Never a Variance

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