Check my work 6 You brought your work home one evening, and your nephew spilled
ID: 2515903 • Letter: C
Question
Check my work 6 You brought your work home one evening, and your nephew spilled his chocolate milk shake on the variance report you were preparing. Fortunately, knowing that overhead was applied based on machine hours, you were able to reconstruct the obliterated information from the remaining data. Fill in the missing numbers below. (Round your answer to two decimal places. Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "O" for no effect (i.e., zero variance).) 1.19 points eBook Standard machine hours per unit of output Standard variable-overhead rate per machine hour$11.00 Actual van Actual machine hours per unit of output Budgeted fixed overhead Actual fixed overhead Budgeted production in units Actual production in units Variable-overhead spending variance Variable-overhead efficiency variance Fixed-overhead budget variance Fixed-overhead volume variance Total actual overhead Total budgeted overhead (lexible budget) Total budgeted overhead (static budget) Total applied overhead 4 hours d rate per machine hour Print $ 54,600 $ 72,100 19,500 References $ 65,000 Unfavorable $ 154,000 Favorable $17,500 Unfavorable nfavorable $ 687,100 $ 748,800Explanation / Answer
Solution:
Total actual overhead = $687,100
Actual fixed overhead = $72,100
Actual variable overhead = $687,100 - $72,100 = $615,000
Variable overhead spending variance = $65000 U
Standard variable overhead cost = $615,000 - $65,000 = $550,000
Standard variable overhead rate per machine hour = $11
Standard machine hours for actual production = $550,000 / 11 = 50000 hours
Standard machine hours per unit of output = 4 hours
Actual production in units = 50000/4 = 12500 units
Variable overhead efficiceny variacne = $154,000 F
(SH - AH) * SR = $154,0000
(50000 - AH)* $11 = $154,000
AH = 36000
Actual machine hours per unit of output = 36000 / 12500 = 2.88 hours
Variable overhead rate variance = $154,000 + $65,000 = $219000 U
(SR - AR) * AH = -$219,000
($11 - AR) * 36000 = $219000 = $17.08 per machine hours
Budgeted fixed overhead per unit = $54,600 / 19500 = $2.80 per unit
Actual production = 12500 units
Applied fixed overhead = 12500 * $2.80 = $35,000
Fixed overhead volume variance = Applied fixed overhead - Budgeted fixed overhead = $35,000 - $54,600 = $19,600 U
Total budgeted overhead (Flexible budget) = Variable overhead for actual production + Budgeted fixed overhead
= (12500*4*$11) + $54,600 = $604,600
Total budgeted overhead (Static budget) = (19500*4*$11) + $54,600 = $912,600