Question

Walkenhorst Company's machining department prepared its 2019 budget based on the following data: Practical capacity Standard machine hours per unit Standard variable factory overhead Budgeted fixed factory overhead 40,000 units 2 $3.00 per machine hour $352,000 The department uses machine hours to apply factory overhead to production. In 2019, the department used 87,000 machine hours and incurred $619,000 in total manufacturing overhead cost to manufacture 42,190 units. Actual fixed overhead cost for the year was $371,000. Required: Determine for the year: 1. The fixed, variable, and total factory overhead application rates (per machine hour). (Round your answers to 2 decimal places.) 2. The total flexible budget, for factory overhead cost based on output achieved in 2019. 3. The production volume variance. State whether this variance was favorable (F) or unfavorable (U). 4. The total overhead spending variance. State whether this variance was favorable (F) or unfavorable (U). 5. The overhead efficiency variance. State whether this variance was favorable (F) or unfavorable (U). 6. The variable overhead spending variance and the fixed overhead spending variance. State whether each variance is favorable (F) or unfavorable (U).

Answer 1

Answer: 10 80,000 Number of units at practicle capacity 40.000 machine hours per unit . Total machine hours at practicle capacity (40000X2) Budgeted total fixed factory overhead $352,000 wolume (Poacticle Capacity) 80,000 fixed factory overhead rate per machine how $ 4.4 352,000 /80,000 variable factory over head rate per machine hour $3 factory overhead application rate per machine $7.4 hour 84380 Total standard machine hours for the units manufactured (42190 x2) Flezible Bedqet : Variable factory over head (84,380 X13) fired factory overhead Total flexible Budget factory ouer head $253,140 $352,000 $605, 140 Budgeted total fixed factory ouer head $352,000 Total fired factory over head applied (84.350x$4.4) $371,272 Fixed overhead production volume voriance $19,272 E $619,000 Total factory ouerhead incurred Flexible Budget -for overhead based on inputs Variable factory ouer head (87,000x$3) Fixed factory over head factory overhead spending variance $ 261,000 $352,000 $613,000 $6,000(0)

Flexible Budget for overhead based on inputs Variable factory overhead (87000x$3) Fixed factory over head Total flexible budget factory overhead overhead efficiency variance $261,000 $352,000 $613,000 $605,140 $7860CUI Total variable factory overhead incurred $248,000 C619,000-371,000) Flexible budget for variable cuehead based on $261,600 in peels (87000X$3) Flexible overhead spending variances $13,000 F Total fixed factory overhead incurred Budget fixed factory overhead Fixed factory overhead spending casiance $371,000 $350,000 $ 19,000 u.