Question
In: Accounting
The information shown below was taken from the annual manufacturing overhead cost budget of Culver Company....
The information shown below was taken from the annual
manufacturing overhead cost budget of Culver Company.
| Variable manufacturing overhead costs | $27,720 | |
| Fixed manufacturing overhead costs | $12,600 | |
| Normal production level in labor hours | 12,600 | |
| Normal production level in units | 4,200 | |
| Standard labor hours per unit | 3 |
During the year, 4,100 units were produced, 19,000 hours were
worked, and the actual manufacturing overhead was $40,760. Actual
fixed manufacturing overhead costs equaled budgeted fixed
manufacturing overhead costs. Overhead is applied on the basis of
direct labor hours.
Compute the total, fixed, and variable predetermined
manufacturing overhead rates. (Round answers to 2
decimal places, e.g. 1.25.)
|
Item |
Rate |
|
| Variable overhead | $ | |
| Fixed overhead | ||
| Total overhead | $ |
Compute the total, controllable, and volume overhead
variances.
| Total overhead variance | $ | Unfavorable, Neither favorable nor unfavorable, Favorable | ||
| Overhead controllable variance | $ | Neither favorable nor unfavorable, Favorable, Unfavorable | ||
| Overhead volume variance | $ | Unfavorable, Neither favorable nor unfavorable, Favorable |
Solutions
Expert Solution
| Answer: |
|
Predetermined Variable overhead
rate = Variable manufacturing overhead costs / No. of labor Hours = $ 27,720 / 12,600 = $ 2.20 per labor hour |
| Variable overhead rate = $ 2.20 per labor hour |
|
Predetermined Fixed overhead
rate = Fixed manufacturing overhead costs / No. of labor Hours = $ 12,600 / 12,600 = $ 1 per labor hour |
| Fixed overhead rate = $ 1 per labor hour |
|
Total overhead = ( $
27,720 + $ 12,600 ) / 12,600 = $ 3.20 per labor hour |
| Total overhead = $ 3.20 |
| 2) |
|
Total overhead variance = Actual overhead (-) Absorbed Overhead = $ 40,760 (-) ( 4,100 Units x 3 x $ 3.20 ) = $ 40,760 (-) $ 39,360 = $ 1,400 (unfavourable ) |
| Total overhead variance = $ 1,400 (unfavourable ) |
|
Overhead controllable variance = Budgeted overhead (-) Actual overhead = ( 4,100 units x 3 x $ 2.20 ) + $ 12,600 ) (-) $ 40,760 = $ 39,660 (-) $ 40,760 = $ 1,100 (unfavourable ) |
| Overhead controllable variance = $ 1,100 (unfavourable ) |
| 3) |
|
Overhead volume variance = Applied Fixed overhead (-) Budgeted fixed overhead = ( 4,100 Units x 3 x $ 1 ) (-) $ 12,600 = $ 12,300 (-) $ 12,600 = $ 300 (unfavourable ) |
| Overhead volume variance = $ 300 (unfavourable ) |
ekkarill92 answered 2 years agoRelated Solutions
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current year, during which it expected to require 18,000 hours of
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Leno Manufacturing Company prepared the following factory
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Variable overhead cost:
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Power and light
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Indirect materials
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Flexible Overhead Budget Leno Manufacturing Company prepared the following factory overhead cost budget for the Press...
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productive capacity in the department:
Variable overhead cost:
Indirect factory labor
$122,200
Power and light
4,160
Indirect materials
35,100
Total variable overhead
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$161,460
Fixed overhead cost:
Supervisory salaries
$56,510
Depreciation of plant and equipment
35,520
Insurance and property taxes
22,600
Total fixed overhead
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114,630
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Flexible Overhead Budget Leno Manufacturing Company prepared the following factory overhead cost budget for the Press...
Flexible Overhead Budget
Leno Manufacturing Company prepared the following factory
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Variable overhead costs:
Indirect factory labor
$118,500
Power and light
6,900
Indirect materials
42,000
Total variable overhead
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$167,400
Fixed overhead costs:
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Insurance and property taxes
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Leno Manufacturing Company prepared the following factory
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Variable overhead costs:
Indirect factory labor
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Power and light
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Indirect materials
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Insurance and property taxes
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1) Flexible Overhead Budget Leno Manufacturing Company prepared the following factory overhead cost budget for the...
1)
Flexible Overhead Budget
Leno Manufacturing Company prepared the following factory
overhead cost budget for the Press Department for October of the
current year, during which it expected to require 18,000 hours of
productive capacity in the department:
Variable overhead cost:
Indirect factory labor
$158,400
Power and light
6,120
Indirect materials
46,800
Total variable overhead
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$211,320
Fixed overhead cost:
Supervisory salaries
$73,960
Depreciation of plant and equipment
46,490
Insurance and property taxes
29,580
Total fixed overhead
cost
150,030
Total...
Flexible Overhead Budget Leno Manufacturing Company prepared the following factory overhead cost budget for the Press...
Flexible Overhead Budget
Leno Manufacturing Company prepared the following factory
overhead cost budget for the Press Department for October of the
current year, during which it expected to require 9,000 hours of
productive capacity in the department:
Variable overhead costs:
Indirect factory labor
$87,300
Power and light
3,780
Indirect materials
27,000
Total variable overhead
cost
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Fixed overhead costs:
Supervisory salaries
$41,330
Depreciation of plant and equipment
25,980
Insurance and property taxes
16,530
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Indirect factory labor
$86,000
Power and light
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Indirect materials
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Fixed overhead cost:
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$42,390
Depreciation of plant and equipment
26,640
Insurance and property taxes
16,950
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cost
85,980
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