Question 1:

In the following embedded Excel file you will find budget and actual production information provided by Bart Trading.

Using this information you are required to:

(a) Calculate the predetermined budgeted factory overhead rate for the year based on Direct Labour Hours

(b) Calculate the amount of factory overhead applied in the year,

(c) Calculate the under or over-applied overhead for the year,

(d) Calculate both the spending and capacity variances, and

(e) Explain possible causes of the spending and capacity variances.

20 10 Cost Drivers Statirtical dat Service department Production Department Cut driver {Fari for allocations Storer Haint--- General Producti. Finirkin Exprver Allocation Premises Floor space (59.m) 300 400 200 insurance Machine Value of machinery $5,000 $80,000 $15,000 depreciation Service Department Re-allocations Stores dept. No. of requisitions 300 2,800 500 Iaintenance Maintenance hours 1,000 300 16,300 3,800 General dept. No. of employees 1 3 Production Departments Recorery Rate Determination PIOGUCTION Machine hours 500 10,000 1,500 Finishing dept. Direct labour $150,000 $140,000 Allocation of Service Department Costs Overhead Costs Service Departacats Producing Departad Budgeted Conte Stores Maintenang General Productio. Finishing $ $ $ $ $ Indirect materials 1,530.00 18,746.00 14,844.00 12,130.00 11,460.00 Indirect labour 49,330.00 56,000.00 58,800.00 3,200.00 2,670.00 Part(a) Premises insurance Part (2) Machine depreciation Part (b) Vaadjusted O/Heads O/Head reallocations Part (c) Stores Part (0) Maintenance Part (c) General Part (2) Adjusted O/Heads Productio: Finishing Part (0) Overhead Recovery Rate Total $ 58,770.00 170,000.00 1,860.00 15,000.00 245.630.00 20 10 Cost Drivers Statirtical dat Service department Production Department Cut driver {Fari for allocations Storer Haint--- General Producti. Finirkin Exprver Allocation Premises Floor space (59.m) 300 400 200 insurance Machine Value of machinery $5,000 $80,000 $15,000 depreciation Service Department Re-allocations Stores dept. No. of requisitions 300 2,800 500 Iaintenance Maintenance hours 1,000 300 16,300 3,800 General dept. No. of employees 1 3 Production Departments Recorery Rate Determination PIOGUCTION Machine hours 500 10,000 1,500 Finishing dept. Direct labour $150,000 $140,000 Allocation of Service Department Costs Overhead Costs Service Departacats Producing Departad Budgeted Conte Stores Maintenang General Productio. Finishing $ $ $ $ $ Indirect materials 1,530.00 18,746.00 14,844.00 12,130.00 11,460.00 Indirect labour 49,330.00 56,000.00 58,800.00 3,200.00 2,670.00 Part(a) Premises insurance Part (2) Machine depreciation Part (b) Vaadjusted O/Heads O/Head reallocations Part (c) Stores Part (0) Maintenance Part (c) General Part (2) Adjusted O/Heads Productio: Finishing Part (0) Overhead Recovery Rate Total $ 58,770.00 170,000.00 1,860.00 15,000.00 245.630.00