In: Accounting
Walkenhorst Company’s machining department prepared its 2016 budget based on the following data:
Practical capacity |
40,000 |
Units |
Machine hours per unit |
2.00 |
|
Variable factory overhead |
$3.00 |
Per machine hour |
Fixed factory overhead |
$392,000 |
The department uses machine hours to apply factory overhead. In 2016, the department used 85,400 machine hours and $653,000 in total manufacturing overhead to manufacture 42,030 units. Actual fixed overhead for the year was $399,000. |
Required: |
|
Determine for the year: |
|
1. |
The variable, fixed, and total factory overhead application rates. (Round your answers to 2 decimal places.) |
Variable overhead application rate |
|
Fixed overhead application rate |
|
Total Factory overhead application rate |
2. |
The flexible budget for overhead cost based on output achieved in 2016. (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.) |
Flexible budget for overhead cost |
3. |
The fixed overhead production volume variance. (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.) |
Fixed overhead production volume variance |
Favorable |
4. |
The total overhead spending variance. (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.) |
Spending variance |
Unfavorable |
5. |
The overhead efficiency variance. (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.) |
Efficiency variance |
Unfavorable |
6. |
The variable and fixed overhead spending variances. (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.) |
Variable overhead |
Favorable |
|
Fixed overhead |
Favorable |