Factory Overhead Analysis—Two, Three, and Four Variances; Spreadsheet Application Walkenho...

Factory Overhead Analysis—Two, Three, and Four Variances; Spreadsheet Application Walkenhorst Company’s machining department prepared its 2016 budget based on the following data:

The department uses machine hours to apply factory overhead. In 2016, the department used 85,000 machine hours and $625,000 in total manufacturing overhead to manufacture 42,000 units. Actual fixed overhead for the year was $375,000.

Required Set up an Excel spreadsheet to determine for the year:

1. The variable, fixed, and total factory overhead application rates.

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2. The flexible budget for overhead cost based on output achieved in 2016.

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3. The fixed overhead production volume variance.

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4. The total overhead spending variance.

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5. The overhead efficiency variance.

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6. The variable and fixed overhead spending variances.