Graystone’s production budget for September called for making 60,000 units of a single product. The firm’s production standards allow one-half of a machine hour per unit produced. The fixed overhead budget for September was $54,000. Graystone uses an absorption costing system. Actual activity and costs for September were 

Required:
a. Calculate the predetermined fixed overhead application rate per machine hour that would be used in September.
b. Calculate the number of machine hours that would be allowed for actual September production.
c. Calculate the fixed overhead applied to work in process during September.
d. Calculate the overapplied or underapplied fixed overhead for September.
e. Calculate the fixed overhead budget and volume variances for September.

Transcribed Image Text:

Units produced 58,500 Fixed overhead costs incurred . . . $55,500