A manufacturer of industrial equipment has a standard costing system based on machine hours (MHs) as the
Question:
A manufacturer of industrial equipment has a standard costing system based on machine hours (MHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:
Denominator Level of Activity | 3,900 MHs |
Standard Overhead Costs at the Denominator Activity Level: | |
Variable Overhead Cost | $33,345 |
Fixed Overhead Cost | $61,425 |
The following data pertain to operations for the most recent period:
Actual Hours | 3,900 MHs |
Standard Hours Allowed for the Actual Output | 3,952 MHs |
Actual Total Variable Overhead Cost | $32,565 |
Actual Total Fixed Overhead Cost | $60,675 |
a. | Calculate the Predetermined OverHead Application Rates [POHAR], each rounded to 2 decimals? |
b. | Determine the fixed overhead variances |
c. How much overhead (in total), was applied to products during the period? Show the breakdown.
. Manufacturing Overhead .
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|
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Fixed
Actual Budget Applied
Explain the impact of the volume variance.
Managerial Accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer