Overhead Application, Fixed and Variable Overhead Variances

Kojima Company is planning to produce $2,600,000$ power drills for the coming year. The company uses direct labour hours to assign overhead to products. Each drill

requires $0\mathrm{.}6$ standard hour of labour for completion. The total budgeted overhead was $$1,982,200.$ The total fixed overhead budgeted for the coming year is

$$1,325,800.$ Predetermined overhead rates are calculated using expected production, measured in direct labour hours. Actual results for the year are:

Required:

Round the fixed and variable overhead rates to two decimal places and use in subsequent computations. If required, round final answers to the

nearest dollar.

Compute the applied fixed overhead.

$

Compute the fixed overhead spending and volume variances.

Spending:

Volume:

Unfavourable

Compute the applied variable overhead.