Silverstones production budget for July called for making 40,000 units of a single product. The firms production

Question:

Silverstone’s production budget for July called for making 40,000 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 July was $36,000. Silverstone uses an absorption costing system. Actual activity and costs for July were:

Units produced ........................................... 39.000

Fixed overhead costs incurred ............... $37.000


Required:

a. Calculate the predetermined fixed overhead application rate per machine hour that would be used in July.

b. Calculate the number of machine hours that would be allowed for actual July production.

c. Calculate the fixed overhead applied to work in process during July.

d. Calculate the over- or underapplied fixed overhead for July.

e. Calculate the fixed overhead budget and volume variances for July.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Accounting What the Numbers Mean

ISBN: 978-1260565492

12th edition

Authors: David Marshall, Wayne McManus, Daniel Viele

Question Posted: