The information shown on the next page was taken from the annual manufacturing overhead cost budget of Bluford Company. Variable manufacturing overhead costs . $33,000 Fixed manufacturing overhead costs .. $19,800 Normal production level in labor hours ... 16,500 Normal production level in units ...... 4,125 Standard labor hours per unit ......... 4 During the year, 4,000 units were produced,

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The information shown on the next page was taken from the annual manufacturing overhead cost budget of Bluford Company.

Variable manufacturing overhead costs . $33,000

Fixed manufacturing overhead costs .. $19,800

Normal production level in labor hours ... 16,500

Normal production level in units ...... 4,125

Standard labor hours per unit ......... 4


During the year, 4,000 units were produced, 16,100 hours were worked, and the actual manufacturing overhead was $54,000. Actual fixed manufacturing overhead costs equaled budgeted fixed manufacturing overhead costs. Overhead is applied on the basis of direct labor hours.


Instructions

(a) Compute the total, fixed, and variable predetermined manufacturing overhead rates.

(b) Compute the total, controllable, and volume overhead variances.

(c) Briefly interpret the overhead controllable and volume variances computed in (b).


Related Book For answer-question

Managerial Accounting Tools for business decision making

5th edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

ISBN: 978-0470477144