Primara Corporation has a standard cost system in which it applies overhead to p

Question

Primara Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below Total budgeted fixed over 433,188 s 425,00 61,000 62,080 59,000 fixed overhead cost for the year Budgeted direct labor-hours (denominator 1 Actual direct 1 evel of activity) Standard direct labor-hours allowed for the actual output 1. Compute the fixed portion of the predetermined overhead rate for the year. (Round Fixed portion of the predetermined overheed rate to 2 decimal places.) 2 Compute the fixed overhead budget variance and volume variance. (Indicate the effect of each variance by selecting "F for favorable, "U" for unfavorable, and-None" for no effect (i.?.. zero variance.). Input all amounts as positive values ces overhead rate per DLH Prey 2 of 3 Next

Explanation / Answer

Hey, here is the solution to your question. I hope you understand it in an easy way, it is just formula based topic.

Variance Formula Variance amount F/UF Fixed Portion of predetermined overhead rate Budgeted Fixed overhead cost/ Budgeted Labour hour (433100/61000) 7.1 Per DLH Budget Variance Actual Fixed Overhead-Budgeted Fixed overhead (425000-433100) 8100 F Volume Variance (Budgeted Hours-Standard hours)*Fixed Portion of Predetermined Overhead Rate (61000-59000)*7.1 14200 UF

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