Question

Barley Hopp, Inc., manufactures custom-ordered commemorative beer steins. Its standard cost information follows: Direct materials (clay) Direct labor Variable manufacturing overhead (based on direct labor hours) Fixed manufacturing overhead ($487,500 = 195,000 units) Standard Quantity 1.8 lbs. 1.8 hrs. 1.8 hrs. Standard Price (Rate) $ 1.90 per lb. $ 16 per hr. $ 1.1 per hr. Standard Unit Cost $ 3.42 28.80 1.98 2.50 Barley Hopp had the following actual results last year: Number of units produced and sold Number of pounds of clay used Cost of clay Number of labor hours worked Direct labor cost Variable overhead cost Fixed overhead cost 200,000 368,200 $ 736,400 245,000 $5,806,500 $ 390,000 $ 470,000 Required: 1. Calculate the fixed overhead spending variance for Barley Hopp (Do not round you Fixed Overhead Spending Variance 2. Calculate the fixed overhead volume variance for Barley Hopp. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.) Fixed Overhead Volume Variance 3. Calculate the total over- or underapplied fixed manufacturing overhead for Barley Hopp (Do not round your intermediate calculations.) Fixed overhead

Answer 1

Answer with working is given below

$17,500 Favourable Fixed Overhead Spending variance 1 Actual Overhead Budgeted Fixed Overhead $470,000 $487,500 $17,500 Favourable Spending Variance $12,500 Favourable Fixed Overhead volume variance 2 Actual Volume 200,000 $2.50 $500,000 $487,500 $12,500 Favourable Standard Rate Standard Fixed OH for actual Budgeted Fixed Overhead Fixed Overhead volume variance Over or Under applied overhead $30,000 Over-Applied 3 Actual units Standard Fixed OH rate for actual Applied Overhead Actual overhead 200,000 $2.50 $500,000 $470,000 $30,000 Over applied Overhead

$17,500 Favourable Fixed Overhead Spending variance 1 Actual Overhead Budgeted Fixed Overhead Spending Variance $470,000 $487,500 $17,500 Favourable Fixed Overhead volume variance $12,500 Favourable 2 $200,000 $2.50 $500,000 $487,500 $12,500 Favourable Actual Volume Standard Rate Standard Fixed OH for actual Budgeted Fixed Overhead Fixed Overhead volume variance $30,000 Over-Applied Over or Under applied overhead 3 $200,000 $2.50 Actual units Standard Fixed OH rate for actual Applied Overhead Actual overhead Over applied Overhead $500,000 $470,000 $30,000