Fixed Overhead Rate; Denominator Level; Two-Variance Analysis Overhead information for Cra...

Fixed Overhead Rate; Denominator Level; Two-Variance Analysis Overhead information for Cran-Mar Company for October follows:

Required

1. What is the standard fixed factory overhead rate per machine hour?

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2. What is the denominator activity level that was used to establish the fixed overhead application rate?

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3. Prepare a diagram such as the one in Exhibit 15.7, Panel 3, to calculate the following overhead variances for October

a. Total flexible-budget variance for factory overhead.

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b. Fixed overhead production volume variance.

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c. Total factory overhead cost variance.

EXHIBIT 15.7 Schmidt Machinery Company, Overhead Variance Analyses, October 2016