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:

(a)        The denominator activity of 60,000 machine-hours is used to compute the predetermined overhead rate.

(b)        At the 60,000 standard machine-hours level of activity, the company should produce 40,000 units of product.

(c)        The company’s actual operating results were:

Required:

1.         Compute the predetermined overhead rate and break it down into variable and fixed cost elements.

2.         Compute the standard hours allowed for the actual production.

3.         Compute the variable overhead rate and efficiency variances and the fixed overhead budget and volume variances.

Transcribed Image Text:

Number of units produced 42,000 Actual machine-hours 64,000 Actual variable overhead cost Actual fixed overhead cost S185,600 S302,400