Sucher Company uses a standard cost system in which manufacturing overhead costs are applied to units of
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Question:
Sucher Company uses a standard cost system in which manufacturing overhead costs are applied to units of product on the basis of machine hours. | ||||||
The company's condensed flexible budget for manufacturing overhead is given below: | ||||||
Per | Machine Hours | |||||
Machine hour | 20,000 | 25,000.00 | 30,000.00 | |||
Variable overhead costs | 3.00 | |||||
Fixed overhead costs | 60,000.00 | 75000 | 90000 | |||
Total overhead costs | 300,000.00 | 300,000.00 | 300,000.00 | |||
$360,000 | $375,000 | $390,000 | ||||
The denominator level of activity is 30,000 machine hours. overhead costs for the year are given below: | ||||||
Standards call for 2.5 machine hours per unit of output. | ||||||
Actual activity and manufacturing overhead costs for the year are given below: | ||||||
Units produced | 12,800 units | |||||
Machine hours used | 31,600 machine hours | |||||
Overhead cost incurred: | ||||||
Variable costs | 96,000.00 | |||||
Fixed costs | 297,000.00 | |||||
Required: | ||||||
(a) | What was the variable overhead spending variance? | |||||
(b) | What was the variable overhead efficiency variance? | |||||
(c) | What was the fixed overhead budget variance? | |||||
(d) | What was the fixed overhead volume variance? |
Related Book For
Cost Accounting A Managerial Emphasis
ISBN: 978-0133138443
7th Canadian Edition
Authors: Srikant M. Datar, Madhav V. Rajan, Charles T. Horngren, Louis Beaubien, Chris Graham
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