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Norwall Companys budgeted variable manufacturing overhead cost is $1.30 per machine-hour and its budgeted fixed manufacturin1. Predetermined overhead rate per MH Variable element per MH Fixed element per MH 2. Standard hours allowed for the actual p

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Answer #1
1) Budgeted fixed manu. OH $ 85,347.00
Machine hours 29430
Fixed Element $           2.90
Variable Element $           1.30
Predetermined OH rate $           4.20
2) Standard Hours Allowed = (29430 hours / 10900 units) x 11840 units
= 31968 hours
3) Standard (11840 units) Actual (11840 units)
Hours Rate Amount Hours Rate Amount
31968 $      1.30 $ 41,558.40 30430 $      1.50 $ 45,645.00
Variable OH rate variance = (Standard Rate - Actual Rate) x Actual Hours
= ($ 1.30 - $ 1.50) x 30430
= $   6,086.00 (U)
Variable OH effi. Variance = (Standard hours - Actual Hours) x Standard Rate
= (31968 - 30430) x $ 1.30
= $   1,999.40 (F)
4) Budgeted Hours 29430
Recovery Rate $           2.90
Budgeted OH $ 85,347.00
Actual Hours 30430
Recovery Rate $           2.90
Recovered OH $ 88,247.00
Actual OH $ 84,800.00
Fixed OH budget variance = Budgeted OH - Actual OH
= $ 85347 - $ 84800
= $    547.00 (F)
Fixed OH volume variance = Recovered OH - Budgeted OH
= $ 88247 - $ 85347
= $ 2,900.00 (F)

Note: Just let me know if it's incorrect, will make it right for you

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