Norwall Company\'s budgeted variable manufacturing overhead cost is $1.90 per ma

Question

Norwall Company's budgeted variable manufacturing overhead cost is $1.90 per machine-hour and its budgeted fixed manufacturing overhead is $87,000 per month. The following information is available for a recent month a. The denominator activity of 34,800 machine-hours is used to compute the predetermined overhead rate b. At a denominator activity of 34,800 machine-hours, the company should produce 12,000 units of product. c. The company's actual operating results were Number of units produced Actual machine-hours Actual variable manufacturing overhead cost Actual fixed manufacturing overhead cost 12,930 36,030 $ 72,060 $ 85,300 Required 1. Compute the predetermined overhead rate and break it down into variable and fixed cost elements. (Round your answers to 2 decimal places.) 2. Compute the standard hours allowed for the actual production 3. Compute the variable overhead rate and efficiency variances and the fixed overhead budget and volume variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Round your intermediate calculations and final answers to 2 decimal places.) per MH per MH per MH MHs 1. Predetermined overhead rate Variable element Fixed element 2. Standard hours allowed for the actual production 3. Variable overhead rate variance Variable overhead efficiency variance Fixed overhead budget variance Fixed overhead volume variance

Explanation / Answer

WN Working Note: 1 Predetermined Overhead Rate: 4.40 Per MH BudgetedFixed OH 87000 Variable Element 1.90 Per MH Budgeted MH 34800 Fixed Element 2.50 Per MH 1 1 Fixed Predetermined OH 2.50 2 Standard Hours Allowed for the Production 37497 MHs 2 3 Variable Overhead Rate Variance -3603 Unfavourable 3A 2 Budgeted MH 34800 Variable Overhead Efficency Variance 2787.3 Favourable 3B Budgeted Units 12000 Fixed Overhead Budget Variance 1700 Favourable 4A Fixed Overhead Volume Variance 6742.5 Favourable Standard MH PU 2.90 Actual Units 12930 4A Fixed Overhead Budget Variance Budgeted FOH-Actual FOH Standard Hours Allowed for the Production 37497 87000-85300 (Standard MH PU*Actual Units) 1700 F 3 Standard: Qty PU Amount 4B Fixed Overhead Volume Variance Variable OH 2.90 1.90 5.51 Budgeted FOH-FOH Applied 87000-93742.5 Standard For Actual Production Qty PU Amount -6742.5 F Variable OH 37,497 1.90 71244.30 FOH Applied: Actual For Actual Production Qty PU Amount Standard Hour Allowed 37497 Variable OH 36,030 2.00 72060 Fixed OH Rate 2.50 (72060/36030) Applied FOH 93742.5 3A Variable Overhead Rate Variance (Standard Price-Actual Price)Actual Hours (1.90-2.00)36030 -3603 UF 3B Variable Overhead Effiency Variance (Standard Hour-Actual Hour)Standard Price (37497-36030)1.90 2787.3 F

Related Questions

Navigate

• Browse (All)
• Browse N
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.