Problem 11-41 Overhead Calculations; Variance Interpretation (LO 11-5)

Maxwell Company uses a standard cost accounting system and applies production overhead to products on the basis of machine hours. The following information is available for the year just ended:

Standard variable-overhead rate per hour: $7.30

Standard fixed-overhead rate per hour: $12.60

Planned activity during the period: 20,000 machine hours

Actual production: 12,700 finished units

Machine-hour standard: Two completed units per machine hour

Actual variable overhead: $164,500

Actual total overhead: $462,950

Actual machine hours worked: 23,500

Required:

1. 1. Calculate the budgeted fixed overhead for the year.

2. 2. Compute the variable-overhead spending variance.

3. 3. Calculate the companys fixed-overhead volume variance.

4. 4-a. Did Maxwell spend more or less than anticipated for fixed overhead? How much?

5. 4-b. What was the difference in actual and anticipated overhead?

6. 5. Was variable overhead underapplied or overapplied during the year? By how much?

7. 

Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4A Required 4B Required 5 Calculate the budgeted fixed overhead for the year. Budgeted fixed overhead