Please just provide the answers that go in the yellow boxes :) World Company exp
ID: 2478214 • Letter: P
Question
Please just provide the answers that go in the yellow boxes :)
World Company expects to operate at 80% of its productive capacity of 61, 250 units per month. At this planned level, the company expects to use 29.400 standard hours of direct labor. Overhead is allocated to products using a predetermined standard rate based on direct labor hours. At the 80% capacity level, the total budgeted cost includes $47,040 fixed overhead cost and $355,740 variable overhead cost. In the current month, the company incurred $390,000 actual overhead and 26,400 actual labor hours while producing 46.000 units. Compute the overhead volume variance. (Round all your intermediate calculations to 2 decimal places.)Explanation / Answer
(1)
Fixed Overhead applied: Actual Direct Labor Hours used 26400 hours Pre-determined applied rate $47040/29400 = $1.60 per DLH Fixed Overhead applied $42240 VOLUME VARIANCE Standard hours for actual units 29400/61250 = 0.48 * 46000 = 22080 hours Actual hours used 26400 hours Fixed Overhead volume variance (22080 - 26400) * $1.60 = $6912 UF