BL Manufacturing Inc. makes copper mugs. The company has the following standards: Direct...
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BL Manufacturing Inc. makes copper mugs. The company has the following standards: Direct materials (clay).............. Direct labour.. Static budget variable overhead. Static budget fixed overhead. Static budget direct labour hours.... Static budget number of bottles...... 1.3 kg per bottle, at a cost of $0.40 per kg 1/5 hour per bottle, at a cost of $14.80 per hour $70,500 $30,500 10,000 52,000 BL Manufacturing Inc. allocates manufacturing overhead to production based on standard direct labour hours. Last month the company reported the following actual results for the production of 69,000 bottles: Direct materials. Direct labour........ Actual variable overhead. Actual fixed overhead... 1.5 kg per bottle, at a cost of $0.70 per kg 14 hour per bottle, at a cost of $12.90 per hour $104,600 $28,700 Refer to the above data and calculate and interpret manufacturing overhead variances and specifically: 12. Calculate the total manufacturing overhead variance. What does this tell management? 13. Calculate the overhead flexible budget variance. What does this tell management? 14. Calculate the production volume variance. What does this tell management
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