Check my work View previous attempt 5 Exercise 10A-1 Fixed Overhead Variances [L

Question

Check my work View previous attempt 5 Exercise 10A-1 Fixed Overhead Variances [L010-4] 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: points Total budgeted fixed overhead cost for the yeair Actual fixed overhead cost for the year Budgeted direct labor-hours (denominator level of activity) Actual direct labor-hours Standard direct labor-hours allowed for the actual output 530,400 521,000 68,000 69,000 66,000 Hint Print Required 1. Compute the fixed portion of the predetermined overhead rate for the year. (Round Fixed portion of the predetermined overhead 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.e., zero variance.). Input all amounts as positive values.) per DLH 1. Fixed portion of the predetermined overhead rate 2. Budget variance Volume variance

Explanation / Answer

1)

Total budgeted fixed overhead cost for the year = 530400

Budgeted direct labor hours = 68000

Fixed portion of the predetermined overhead rate for the year

= Total budgeted fixed overhead cost for the year / Budgeted direct labor hours = = 530400/68000

= 7.80 per DLH

2)

Budget variance = Total budgeted fixed overhead cost - Actual fixed overhead cost

= 530400 - 521000 = 9400 F

Volume variance = Actual direct labor hours - Standard direct labor hours

= 69000 - 66000 = 3000 U

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