Question

Exercise 23-12 Byrd Company producone product, a putter called GO Putten Byrd a standard co The normal production capacity for this pulber 100.000 units per year. The total budgled SS50,000 of fixed costs. Byrd applies head on the base of direct labor hours m and determines that should take a d at normal capacity $850,000 hour of direct labore to produce Pulle of $300,000 of variable costs and During the currytar, Byrd produced 81,700 putas, worked 97,800 direct labows, and curred variable verwad ost of $173,613 and fixed Overhead costs of $541,450. Compute the premind variable date and the predetermined for overhead rate. (Round answers to 2 decimal places, L. 2.25.) Variable Predetermined Overhead Compule the applied overhead for Byed for the year. Overhead Applieds Compute the total head wariance Total Overhead Variance Click if you would like to Show Work for this questionQuan Show Works

Exercise 23-12 Byrd Company produces one product, a putter called GO-Putter. Byrd uses a standard cost system and determines that it should take one hour of direct labor to produce one GO-Putter. The normal production capacity for this putter is 100,000 units per year. The total budgeted overhead at normal capacity is $850,000 comprised of $300,000 of variable costs and $550,000 of fixed costs. Byrd applies overhead on the basis of direct labor hours. During the current year, Byrd produced 81,700 putters, worked 97,800 direct labor hours, and incurred variable overhead costs of $173,613 and fixed overhead costs of $641,450.

Compute the predetermined variable overhead rate and the predetermined fixed overhead rate. (Round answers to 2 decimal places, e.g. 2.75.) Variable Fixed Predetermined Overhead Rate $ $

Compute the applied overhead for Byrd for the year. Overhead Applied $

Compute the total overhead variance. Total Overhead Variance $ UnfavorableFavorableNeither favorable nor unfavorable

Answer 1

Solution 1:

Predetermined Overhead rate = Budgeted Overhead / Budgeted Hours

Variable = $300000 / (100000*1) = $3 per hour

Fixed = $550000 / (100000*1) = $5.50 per hour

Solution 2:

Standard hours = 81700 units * 1 hour = 81,700 hours

Overhead applied = 81700 * ($3+ $5.50) = $694,450

Solution 3:

Total Overhead variance = Overhead applied - Actual Total Overhead

= $694,450 - ($173,613+ $641,450)

= $120,613 Unfavorable