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Alden Company uses a three-variance analysis for factory overhead variances. Practical capacity is defined as...

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Accounting

image Alden Company uses a three-variance analysis for factory overhead variances. Practical capacity is defined as 32 setups and 32,000 machine hours to manufacture 6,400 units for the year. Selected data for 2022 follow: Required: 1. Compute (a) the total overhead spending variance, (b) the overhead efficiency variance, and (c) the total overhead flexible budget variance for 2022. Label each variance as favorable (F) or unfavorable (U). 2. Assume that the company includes all setup costs as variable factory overhead. The budgeted total fixed overhead, therefore, is $174,000, and the standard variable overhead rate per setup is $3,750. What are (a) the total overhead spending variance, (b) the overhead efficiency variance, and (c) the total overhead flexible budget variance for the year? Label each variance as favorable (F) or unfavorable (U). 3. Assume that the company uses only machine hours as the activity measure to apply both variable and fixed overhead, and that it includes all setup costs as variable factory overhead. What are (a) the Total Overhead Spending Variance, (b) the Overhead Efficiency Variance, and (c) the total Overhead Flexible Budget Variance for the year? Indicate whether each variance is favorable (F) or unfavorable (U)

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