Johnston Equipment develops food processing equipment. The budgeted fixed overhead costs for 2018 total $768,000. The company

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Johnston Equipment develops food processing equipment. The budgeted fixed overhead costs for 2018 total $768,000. The company uses direct labour-hours for fixed overhead allocation and anticipates 480,000 hours during the year for 960,000 units. An equal number of units are budgeted for each month.

During April 84,000 packages (units) were produced and $66,000 was spent on fixed overhead.

Required:

a. Determine the fixed overhead rate for 2018 based on direct labour-hours.

b. Determine the fixed overhead static-budget variance for April.

c. Determine the production-volume overhead variance for April.

Posted Date: Nov 02, 2021 03:25 AM

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Johnston Equipment develops food processing equipment. The budgeted fixed overhead costs for 2018 total $768,000. The company

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Solution A Fixed Overhead rate for 2018 Formulae Budgeted Fixed overhead cost Direc... View the full answer

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