P15-18 Variable and fixed overhead variances-various issues [LO 5, 6] Presented
ID: 2348365 • Letter: P
Question
P15-18 Variable and fixed overhead variances-various issues [LO 5, 6]
Presented here are the original overhead budget and the actual costs incurred during July for Rembrant, Inc. Rembrant's managers relate overhead to direct labor hours for planning, control, and product costing purposes. The original budget is based on budgeted production of 30,000 units in 6,000 standard direct labor hours. Actual production of 32,400 units required 6,750 actual direct labor hours.
Calculate the flexed budget allowances for variable and fixed overhead for July. (Do not round intermediate calculations. Omit the "$" sign in your response.)
Calculate the direct labor efficiency variance for July expressed in terms of direct labor hours. (Input the amount as positive value. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)
Calculate the predetermined overhead application rate for both variable and fixed overhead for July. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Calculate the fixed and variable overhead applied to production during July if overhead is applied on the basis of standard hours allowed for actual production achieved. (Round your intermediate calculations to 2 decimal places. Omit the "$" sign in your response.)
Calculate the fixed overhead budget and volume variances for July. (Input the amount as positive value. Round your intermediate calculations to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)
Calculate the over- or underapplied fixed overhead for July. (Input the amount as positive value. Omit the "$" sign in your response.)
Presented here are the original overhead budget and the actual costs incurred during July for Rembrant, Inc. Rembrant's managers relate overhead to direct labor hours for planning, control, and product costing purposes. The original budget is based on budgeted production of 30,000 units in 6,000 standard direct labor hours. Actual production of 32,400 units required 6,750 actual direct labor hours.
Explanation / Answer
(f) Standard Hour for Actual output = 6000 x 32400/30000 = 6480 hours Fixed Overhead = 54000/6000 = = $9 per hour Fixed overhead applied = 6480 x 9 = $58320 Actual overhead = $56400 Overapplied of overhead = 58320 - 56400 = $1920
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