Question

r the work you have completed so far. It does not indicat Norwall Company's budgeted variable manufacturing overhead cost is $1.05 per machine-hour and its budgeted fixed manufacturing overhead is $31,382 per month. a. The denominator activity of 8,840 machine-hours is used to compute the predetermined overheqd rate. so b. At a denominator activity of 8,840 machine-hours, the company should produce 3,400 units of product. c. The company's actual operating results were: Number of units produced Actual machine-hours Actual variable manufacturing overhead cost Actual fixed manufacturing overhead cost 4,360 s 11,964 s 30,000 the predetermined overhead rate and break it down into variable and fixed cost elements. (Round your answers to 2 decimal places.) 3. Compute the variable overhead rate and e Input all amounts as positive values. Round your intermediate calculations and final answers to 2 decimal places.) the variable overhead rate and efficiency variances and the fixed overhead budget and volume variances.(ndicate able, and "None" for no effect (i.e., zero variance). "F" for 460per MH 1.05per MH 355per MH < Prev 50, 7111 Next >
I just need number 3

Answer 1

Answer:

Predetermined overhead rate	4.6
Variable element	1.05
Fixed element (4.6-1.05)	3.55
Standard Hours allowed for actual Production	11336
Variable Overhead rate variance	1495.5	U
Variable Overhead efficiency variance	1434.3	F
Fixed Overhead Budget Variance	1382	F
Fixed Overhead Volume Variance	8860.8	F

Working notes for the above answer is as under

1

Predetermined overhead rate

={(1.05*8840)+31382} /8840

=40664/8840

=4.6

2

Standard Hours allowed for actual Production

=Actual Units product x standard Hour Required for One unit

=4360 x (8840/3400)

=4360 x 2.6

=11,336 hour

3

Variable Overhead rate variance

=(AH x AR)- (AH x SR)

=(11964)- (9970*1.05)

=11964-10468.5

=1495.5 U

4

Variable Overhead efficiency variance

=Standard rate x (actual hour- standard Hour)

=1.05 x (9970-11336)

=1434.3 Favorable

5

Fixed Overhead Budget Variance

=Actual Fixed overhead cost-Budgeted Fixed overhead cost

=30,000-31382

=1382 favorable

6

Fixed Overhead Volume Variance

=Fixed Portion of Predetermined Overhead x (Denominator Hour - Standered Hour)

=3.55 x (8840-11336)

=3.55x 2496

=8860.8 Favorable