Question

C o s Incorporat makes a single product-a cooling coil used in commercial refriger . The company has a standard of system in which it applies overhead to this product based on the standard bharbeurs allowed for the actual output of the period. Data cering the most recent year appear below: Budgeted (Planned) Overhead: Budgeted variable manufacturing overheads 82,450 Budgeted fixed manufacturing overhead Budgeted production Actual production 25,000 units 20,000 units Standard Hours needed per Product Unit 1.70 DLH Actual variable manufacturing overhead Actual fixed manufacturing overhead Actual hours $74,812 312,975 31,700 labor-hours Using the table above as needed, answer the following four questions. 27. The variable overhead rate variance is: A) $14,280 F B) $13,314 U C) $14,280 U D) $13,314 F 28) The variable overhead efficiency variance is: A) S4,462 F B) $5,428 U C) $4,462 U D) $5,428 F 29) The fixed overhead budget variance is: A) $13,000 F B) $13,000 U C) $52,195 F D) $52,195 U 30) The fixed overhead volume variance is: A) $52,195 U B) 565,195 U C) 565,195 F D $52,195 F

Answer 1

Solution In the given problem, following information is provided: Budgeted production Actual production 25,000 units 20,000 units Standard Direct labor hours needed per unit 1.70 Hour Standard Direct labor hours needed for actual production (1.70 hour x 20,000 units) Budgeted direct labor hours available (25,000 units x 1.70 hour 34,000 Hours 42,500 Hours Actual direct labor hours worked 31,700 Hours Variable Manufacturing O/H Standard rate per direct labor hour ($82,450/42,500 hours) Variable Manufacturing O/H Actual rate per direct labor hour ($74,812 / 31,700 hours) $1.94 per hour $2.36 per hour Fixed Manufacturing O/H Standard rate per direct labor hour ($325,975/42,500 hours) Budgeted fixed manufacturing overheads Actual fixed manufacturing overheads $7.67 per hour $325,975 $312,975 Variable overhead rate variance Variable O/H rate variance= (Actual rate standard rate)x Actual labor hours worked ($2.36 -$1.94) x 31,700 hours $13,314 (U) Variable overhead efficiency variance Variable O/H efficiency variance (Actual hours Standard hours) x standard rate (31,700 hours 34,000 hours) x $1.94 $4,462 (F) Fixed Overhead Budget Variance Fixed overhead budget variance Actual fixed overhead Budgeted Fixed overhaed $312,975 - $325,975 $13,000 (F) Fixed Overhead volume Variance Fixed overhead budget variance Budgeted fixed overhead (Standard DLH x Standard rate) = $325,975 - (34,000 x $7.67) $65,195 (U) Question# 27 The variable overhead rate variance is: B) $13,314 U The variable overhead efficiency variance is Question # 28 A) $4,462 F Question #29 The fixed overhead budget variance is: A) $13,000 F Question#30 The fixed overhead volume variance is: B) $65,195 U