Understanding Relationships between Overhead Variances, Budgeted Amounts, and Actual Units Produced and Direct Labor Hours Worked...

Understanding Relationships between Overhead Variances, Budgeted Amounts, and Actual Units Produced and Direct Labor Hours Worked Last year, Gladner Company had planned to produce 144,500 units. However, 145,945 units were actually produced. The company uses direct labor hours to assign overhead to products. Each unit requires 0.9 standard hour of labor for completion. The fixed overhead rate was $11 per direct labor hour and the variable overhead rate was $6.36 per direct labor hour.

The following variances were computed: Fixed overhead spending variance $24,000 U Variable overhead spending variance $9,196 U

Fixed overhead volume variance 29,700 F Variable overhead efficiency variance 1,272 U

Required:

Round your answers to the nearest whole dollar.

1. Calculate the total applied fixed overhead. $1,444,856

2. Calculate the budgeted fixed overhead. $1,430,550

3. Calculate the actual fixed overhead. $ 1,454,550

4. Calculate the total applied variable overhead. $ 835,389

5. Calculate the number of actual direct labor hours. hrs 131,550

6. Calculate the actual variable overhead. $

I have the answeres for all questions but #6. I have searched chegg on how to solve this but all the other questions are qrong can someone please help me with this thank you

Solutions

Expert Solution

Req 1
Actual output: 145945 units
Labour hour per unit: 0.9
Std hours allowwed: (145945 units*0.9 hour): $131,350.50 hours
Fixed OH rate per hour: $11

Applied fixed OH: Std horus allowed * OH rate
		131350.50 *11 = $1444,856

Req 2&3
Fixed OH volume Variance: Applied fixed OH -Budgeted Fixed OH
29700 = 1444,856 - Budgeted OH
Budgeted OH: $1415,156

Fixed OH Spending variance: Budgeted Fixed Oh - Actual Fixed
24000 U = 1415156 - Actual Fixed OH
Actual fixed OH = 1439156

Req 4:
Variable OH applied: Std hours allowed*Variable OH rate
		131350.50*6.36 = $ 835,389

Req 5:
Variable OH efficiency variance: Std rate per hour (Std horus-Actual hours)
1272 U = 6.36 (131350.50 -Actual hours)
Actual hours= 131550.50 hours

Req 6:
Variable spending variance: Actual hours (Std rate-Actual rate)
9196 U = 131550.50 (6.36- Actual rate)
Actual rate per hour: 6.43 per hour

Actual Variable OH cost: 131550.50 hours @6.43 per hour: $ 845,870

ekkarill92 answered 9 months ago

Next > < Previous

Related Solutions

The manufacturing overhead budget at Franklyn Corporation is based on budgeted direct labor-hours. The direct labor...

The manufacturing overhead budget at Franklyn Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 2,600 direct labor-hours will be required in January. The variable overhead rate is $7 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $43,100 per month, which includes depreciation of $3,660. All other fixed manufacturing overhead costs represent current cash flows. The January cash disbursements for manufacturing overhead on the manufacturing overhead budget should be: Multiple Choice $61,300 $18,200 $57,640...

Input price and input efficiency variances The budgeted and actual data for direct materials and labor...

Input price and input efficiency variances The budgeted and actual data for direct materials and labor are as follows: Budgeted Actual DM price $3 per pound $2.75 per pound DM quantity per unit 3 pounds per unit 4 pounds per unit DL price $10 per hour $13 per hour DL quantity per unit 0.2 hours per unit 0.3 hours per unit Actual sales volume is 100 units. Budgeted sales volume is 80 units. Compute the input price and input efficiency...

Direct Materials, Direct Labor, and Reports budgeted and actual costs for variable and fixed factory overhead...

Direct Materials, Direct Labor, and Reports budgeted and actual costs for variable and fixed factory overhead along with the related controllable and volume variances.Factory Overhead Cost Variance Analysis Mackinaw Inc. processes a base chemical into plastic. A detailed estimate of what a product should cost.Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 7,200 units of product were as follows: Standard Costs Actual Costs Direct materials 9,400 lb. at $5.20 9,300...

Estimated manufacturing overhead $ 500,000 Actual manufacturing overhead $ 550,000 Estimated direct labor hours 10,000 hours...

Estimated manufacturing overhead $ 500,000 Actual manufacturing overhead $ 550,000 Estimated direct labor hours 10,000 hours Actual direct labor hours 10,500 13. Calculate the predetermined overhead allocation rate using direct labor hours as the allocation base. 14. Determine the amount of overhead allocated during the year. Record the journal entry. 15. Determine the amount of underallocated or overallocated overhead. Record the journal entry to adjust Manufacturing Overhead.

Budget Actual Direct labor hours. . . . . . . . . . . ....

Budget Actual Direct labor hours. . . . . . . . . . . . . . . . . . . . . . . . 7,600 hours 6,100 hours Machine hours. . . . . . . . . . . . . . . . . . . . . . . . . . . 7,000 hours 6,500 hours Depreciation on salespeople's autos. . . . . . . . . . . $21,500 $21,500...

MAnufacturing overhead is applied on the basis of direct labor hours. The direct labor hours for...

MAnufacturing overhead is applied on the basis of direct labor hours. The direct labor hours for the period are 500 and the estimated manufacturing overhead is 2000. actual direct labor hours were 160 and actual overhead was 1000. Compute the manufacturing overhead applied during this period.

Northface Company applies overhead based upon labor-hours. Budgeted factory overhead was $910,000 and budgeted labor-hours were...

Northface Company applies overhead based upon labor-hours. Budgeted factory overhead was $910,000 and budgeted labor-hours were 32,500. Actual factory overhead was $893,675 and actual labor-hours were 31,560. Required: a. Compute the overhead application rate. b. Compute the amount of overhead applied to production. c. Determine the amount of over- or underapplied overhead.

Budgeted overhead cost $1,050,000 Estimated machine hours 50,000 Estimated direct labor hours 10,000 Estimated direct materials...

Budgeted overhead cost $1,050,000 Estimated machine hours 50,000 Estimated direct labor hours 10,000 Estimated direct materials cost $1,500,000 Maverick’s inventory count, completed on December 31, 2016, revealed the following ending inventory balances: Raw Materials Inventory $250,000 Work in Process Inventory $626,000 Finished Goods Inventory $340,000 The company’s 2017 payroll data revealed the following actual payroll costs for the year: Job Title Number Employed Wage Rate per Hour Annual Salary per Employee Total Hours Worked per Employee President and CEO 1...

Overhead is applied on the basis of direct labor hours. Three direct labor hours are required...

Overhead is applied on the basis of direct labor hours. Three direct labor hours are required for each product unit. Planned production for the period was set at 8,000 units. Manufacturing overhead for the period is budgeted at $204,000, of which 30 percent is fixed. The 26,200 hours worked during the period resulted in production of 8,500 units. Manufacturing overhead cost incurred was $220,500. Required: a. Calculate the overhead spending variance: b. Calculate the overhead efficiency variance: c. Calculate the...

1) List sources of variances between budgeted and actual amounts 2) Describe the concept of zero-based...

1) List sources of variances between budgeted and actual amounts 2) Describe the concept of zero-based budgeting.

Subjects