(a) Item Rate LINK TO TEXT (b) The information shown below was taken from the an
ID: 2489781 • Letter: #
Question
(a)
Item
Rate
LINK TO TEXT
(b)
The information shown below was taken from the annual manufacturing overhead cost budget of Connick Company.Variable manufacturing overhead costs $17,600 Fixed manufacturing overhead costs $8,000 Normal production level in labor hours 8,000 Normal production level in units 4,000 Standard labor hours per unit 2
During the year, 3,900 units were produced, 14,000 hours were worked, and the actual manufacturing overhead was $25,960. Actual fixed manufacturing overhead costs equaled budgeted fixed manufacturing overhead costs. Overhead is applied on the basis of direct labor hours.
Explanation / Answer
variable overhead= amount/hours= 17600/8000=2.2
fixed overhead==8000/8000=1
total overhead=1+2.2=$3.2
total overhead variane=overhead incurred-overhead applied
=actual-(predetermined*actual hr)
=25960-(3.2*7800)=$1000 unfavourable
Overhead controllable variance=overhead incurred-overhead applied
=25960-[(7800*2.2)+8000]=800 unFavourable
Overhead volume variance=(normal-std hours)*fixed overhead rate
=(8000-7800)*1=200 unFavourbale
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