contestada

Norwall Company's variable manufacturing overhead should be 3.00 per standard machine-hour and its fixed manufacturing overhead should be 300,000 per period. The following information is available for a recent period: (i) The denominator activity of 60,000 machine-hours is used to compute the predetermined overhead rate. (ii) At the 60,000 standard machine-hours level of activity, the company should produce 40,000 units of product. (iii) The company's actual operating results were:
(c) Compute the variable overhead rate and efficiency variances and the fixed overhead budget and volume variances.

Respuesta :

The company's actual operating results were:

  • the variable overhead rate is 2.90
  • efficiency variances are $3,000 (Unfavorable)
  • the fixed overhead budget is $2,400 (Unfavorable)
  • volume variances is $4,688 (Favorable)

The variable overhead rate is calculated below:

Actual variable overhead rate = Actual variable overhead/Actual machine hours

= $185,600 / 64,000 hours

= $2.90

The efficiency variance is calculated below:

Variable overhead efficiency variance = Standard rate (Actual hours - Standard hours)

= $3.00 (64,000-63,000)

=$3,000 (Unfavorable)

The calculation of fixed overhead budget variance is shown below:

Fixed overhead Budget Variance = Actual fixed overhead-Budgeted fixed overhead

= $302,400-300,000

= $2,400 (Unfavorable)

The calculation of fixed overhead volume budget variance is shown below:

Fixed overhead Volume Variance = Budgeted fixed overhead - Applied Fixed overhead

=300,000 - (Predetermined OH rate x Std Hrs)

= 300,000 - Budgeted Fixed Overhead/Actual Hours x Standard Hours

= 300,000 - ( $300,000/64,000 × 63,000 )

= 300,000 - $295,313

= $4,688 (Favorable)

Learn more about variance here https://brainly.com/question/15858152

#SPJ4

Otras preguntas