For a given department of the Serunity Company, estimated fixed overhead is $360
ID: 2594772 • 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
Only option A is correct.
A / 1 B C D E F G H 2 Budgeted Actual 3 Fixed Overhead $360,000 $358,000 4 Variable Overhead $240,000 $250,000 5 Volume in units 60000 62000 6 Variable Overhead rate per unit $4.00 $4.03 7 Fixed overhead rate per unit $6.00 $5.77 8 9 Variable overhead Variance 10 Actual Flexible Standard 11 12 Rate $4.03 $4.00 $4.00 13 Qty 62,000 62,000 60000 14 Total $250,000 $248,000 $240,000 15 16 $2,000 $8,000 17 U U 18 (i)Budget Variance (ii)Volume Variance 19 $10,000 20 U 21 Total Variable OH Variance = Price Variance + Qty Variance Total Variance 22 23 Fixed overhead Variance 24 Actual Flexible Standard 25 26 Rate $5.77 $6.00 $6.00 27 Qty 62,000 62,000 60000 28 Total $358,000 $372,000 $360,000 29 30 $14,000 $12,000 31 F U 32 (i)Budget Variance (ii)Volume Variance 33 $2,000 34 F 35 Total Fixed OH Variance = Price Variance + Qty Variance Total Variance 36 37 Overheads applied to production $358,000 38 Standard Rate(Variable+Fixed) $10 39 Actual Qty $62,000 40 Cost charged to production $620,000Related Questions
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