For a given department of the Serunity Company, estimated fixed overhead is $360
ID: 2594771 • Letter: F
Question
For a given department of the Serunity Company, estimated fixed overhead is $360,000 and variable overhead is $240,000 at a standard volume of 60,000 units. For November, $358,000 of fixed and $251,000 of variable overhead were incurred to produce 62,000 units. Which of the following statements is (are) true?
Overhead applied to production is $620,000.
Overhead volume variance is $14,000 (favorable).
Overhead budget variance is $3,000 (unfavorable).
All of the other answers are true.
A.Overhead applied to production is $620,000.
B.Overhead volume variance is $14,000 (favorable).
C.Overhead budget variance is $3,000 (unfavorable).
D.All of the other answers are true.
Explanation / Answer
A. Overhead applied to production is $620,000
Total overhead = 360000 + 240000 = 600000
Budgeted or estimated production = 60000
FOAR = 600000 / 60000 = 10 PER UNIT
Overhead applied to production = 62000 units actuall produced * 10 = 620000
Option - b and option - c are wrong values
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