Tules Company is planning to produce 2,400,000 power drills for

Tules Company is planning to produce 2,400,000 power drills for the coming year. The

company uses direct labor hours to assign overhead to products. Each drill requires 0.5

standard hour of labor for completion. The total budgeted overhead was $2,700,000.

The total fixed overhead budgeted for the coming year is $1,320,000. Predetermined overhead rates are calculated using expected production, measured in direct labor hours.

Actual results for the year are:

Actual production (units) .....2,360,000

Actual direct labor hours .....1,190,000

Actual variable overhead ..... $1,410,000

Actual fixed overhead ....... $1,260,000

Required:

1. Compute the applied fixed overhead.

2. Compute the fixed overhead spending and efficiency variances.

3. Compute the applied variable overhead.

4. Compute the variable overhead spending and volume variances.


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