N Fortnite Mob r 21 Homework Saved Help World Company expects to operate at 80%

Question

N Fortnite Mob r 21 Homework Saved Help World Company expects to operate at 80% of its productive capacity of 50,000 units per month. At this planned level, the company expects to use 25,000 standard hours of direct labor. Overhead is allocated to products using a predetermined standard rate of 0.625 direct labor hours per unit. At the 80% capacity level, the total budgeted cost includes $50,000 fixed overhead cost and $275000 variable overhead cost. In the current month, the company incurred $305,000 actual overhead and 22,000 actual labor hours while producing 35,000 units. (Do not round your Intermediate calculations.) (1) Compute the predetermined standard overhead rate for total overhead. Predetermined OH Rate Variable overhead costs Fixed overhead costs Total overhead costs (2) Compute the total overhead variance. tual Production 35,000 units Standard DL Overhead Actual Hours Costs Applied Results Variance Fav/Unf Variable overhead costs Fixed overhead costs Total overhead costs

Explanation / Answer

Req 1: Variable OH rate: Budgeted variable OH / Total Labour hours Fixed OH rate: Budgeted Fixed OH/ Total Labour hours Pre-determined OH rate Variable overheads cost 11 (275000/25,000) Fixed Overheads cost 2 (50,000 /25,000) Total overheads cost 13 Req 2: Total Overheads variance Budgeted Std DLH OH cost applied Actual results Variance Fav/Unfav Vvariable overheads cost 275000 21875 240625 Fixed overheads cost 50000 21875 43750 Total overheads cost 325000 284375 305000 20625 Unfav

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