Based on expected production of 200,000 units, factory overhead costs budgeted for the year were: Variable...

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Based on expected production of 200,000 units, factory overhead costs budgeted for the year were: Variable costs $180,000 $0.90 per unit Total fixed costs $70,000 $0.35 per unit Actual production achieved was 180,000 units. Overhead costs incurred were: Variable costs $160,200 $0.89 per unit Total fixed costs $72,000 $0.40 per unit Required: The predetermined overhead recovery rate per unit The amount of over/under-applied overhead analysed into a spending (budget) variance and a capacity (volume) variance. Favourable (F) or Unfavourable (U) should be included in your variance calculation. Show all the workings in your answers. Based on expected production of 200,000 units, factory overhead costs budgeted for the year were: Variable costs $180,000 $0.90 per unit Total fixed costs $70,000 $0.35 per unit Actual production achieved was 180,000 units. Overhead costs incurred were: Variable costs $160,200 $0.89 per unit Total fixed costs $72,000 $0.40 per unit Required: The predetermined overhead recovery rate per unit The amount of over/under-applied overhead analysed into a spending (budget) variance and a capacity (volume) variance. Favourable (F) or Unfavourable (U) should be included in your variance calculation. Show all the workings in your answers.

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To calculate the predetermined overhead recovery rate per unit we need to consider the budgeted variable costs per unit and the budgeted total fixed c... View the full answer