Question: WLynwood Company produces surge protectors To help control costs Lynwood

WLynwood Company produces surge protectors. To help control costs, Lynwood employs a standard costing system and uses a flexible budget to predict overhead costs at various levels of activity. For the most recent year, Lynwood used a standard overhead rate of $ 18 per direct labor hour. The rate was computed using practical activity. Budgeted overhead costs are $ 396,000 for 18,000 direct labor hours and $ 540,000 for 30,000 direct labor hours.
During the past year, Lynwood generated the following data:
(a) Actual production: 100,000 units;
(b) Fixed overhead volume variance: $ 20,000 U;
(c) Variable overhead efficiency variance: $ 18,000 F;
(d) Actual fixed overhead costs: $ 200,000;
(e) Actual variable overhead costs: $ 310,000.
Required:
1. Calculate the fixed overhead rate.
2. Determine the fixed overhead spending variance.
3. Determine the variable overhead spending variance.
4. Determine the standard hours allowed per unit of product.

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  • CreatedSeptember 22, 2015
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