Question

In: Accounting

Robert Company, which applies overhead to production on the basis of machine hours, reported the following...

Robert Company, which applies overhead to production on the basis of machine hours, reported the following data for the period just ended:

Actual units produced: 12,000

Actual variable overhead incurred: $77,700

Actual machine hours worked: 18,800

Standard variable overhead cost per machine hour: $4.50

Robert estimates that it takes  1.5 hours manufacture a completed unit.

Compute all standards and variances

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Expert Solution

Answer:-Variable overhead efficiency variance=(Standard hours–Actual working hours)*Standard Rate

                                       = ($18000 hours - $18800 hours)*$4.50 per hour   

                                       = $3600 Unfavourable

Variable overhead rate variance = (Standard rate –Actual rate)*Actual working hour

=($4.50 per hour – ($77700/18800 hours) per hour)*18800 hours

=$6900 Favourable

Standard hours =12000 units*1.5 hours

=18000 hours

Variable overhead cost variance= Variable overhead rate variance+ Variable overhead efficiency variance

=$6900 F+$3600 U

=$3300 Favourable

ekkarill92 answered 1 year ago
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