Question

Question 8 Byrd Company produces one product, a putter called GO-Putter. Byrd uses a standard cost system and determines that it should take one hour of direct labor to produce one GO-Putter. The normal production capacity for this putter is 135,000 units per year. The total budgeted overhead at normal capacity is $742,500 comprised of $270,000 of variable costs and $472,500 of fixed costs. Byrd applies overhead on the basis of direct labor hours. During the current year, Byrd produced 85,200 putters, worked 94,000 direct labor hours, and incurred variable overhead costs of $140,580 and fixed overhead costs of $416,600. Compute the predetermined variable overhead rate and the predetermined fixed overhead rate. (Round answers to 2 decimal places, e.g. 2.75.) Variable Fixed Predetermined Overhead Rate $ $ LINK TO TEXT Compute the applied overhead for Byrd for the year. Overhead Applied $ LINK TO TEXT Compute the total overhead variance. Total Overhead Variance $ Click if you would like to Show Work for this question: Open Show Work

Answer 1

one hour of direct labor to produce one GO-Putter
Standard Direct Labor hours at normal capacity (135000*1)			135,000
	Variable cost	Fixed cost	Total cost
Budgeted overhead	$        270,000	$        472,500	$        742,500
Divided by : Standard Direct Labor hours at normal capacity	135,000	135,000	135,000
Predetermined overhead rate	$               2.00	$               3.50	$               5.50
Predetermined variable overhead rate			$               2.00
Predetermined fixed overhead rate			$               3.50
Actual Production			85,200
Multiply: Predetermined overhead rate			$               5.50
Overhead Applied			$        468,600
Actual variable overhead costs			$        140,580
Actual fixed overhead costs			$        416,600
Actual overhead costs			$        557,180
Less: Overhead Applied			$        468,600
Total overhead variance			$          88,580
Indicate			Unfavorable