Problem You brought your work home one evening, and your nephew spilled his choc
ID: 2395255 • Letter: P
Question
Problem You brought your work home one evening, and your nephew spilled his chocolate milk shake on the variance report you were preparing. Fortunately, knowing that overhead was applied based on machine hours, you were able to reconstruct the obiterated information from the remaining data. Fill in the missing numbers below. (Hint It is helpful to solve for the unknowns in the order indicated by the letters in the following table.) Budgeted fixed overhead Actual fixed overhead Budgeted production in units Actual production in units Standard machine hours per unit of output Standard variable-overhead rate per machine hour.... Actual variable-overhead rate par machine hour Actual machine hours per unit of output Variable-overhead spending variance ariable-overhead efficiency varianoe Fixed-overhead budget variance. Fxed-overhead volume varlance Total actual overhead Total budgeted overhead (Mlexible budget) Total budgeted overhead Istatic budget). Total applied overhead 25,000 12,500 4 hours 36,000u $ 96,000F $7,500 U $356,500 408,000 Step-by-step solution Ask an expertExplanation / Answer
ANswer:-
A- Actual fixed overhead - Budgeted fixed overhead = Fixed overhead spending variance/ budget variance
so actual fixed overhead - $25,000 = 7500 ( as unfavorable variance means positive figure)
total actual overhead =
actual fixed overhead variance = 7500+25000 = $32,500
total actual overhead = $ 356,500
fixed overhead = $ 32,500
therefore variable overhead will be = 356500-32500 = $324,000
B- Actual variabe overhead rate per machine hour
actual variable overhead = $ 324,000
variable overhead spending variance = ( actual hour * actual rate ) - (actual hour * standard rate )
= actual overhead - standard overhead
$ 36,000 unfavorable that means actual overhead is exess of 36,000 so
standard overhead cost = 324,000 - 36000 = $288,000
Standard variable ovehead rate per hour of machine = $ 8
so no of machine hours = 288,000 / 8 = 36,000 hours
Variable overhead efficiency variance = SR × (AH – SH)
$96,000 = favorable that means actual hour is lesser than standard hour
standard rate = $ 8.00 per hour X (36000 - actual hour ) = $96,000 ( the formula is written diffrently because we have a favourable variance or else we cn write this as
$8.00 X ( actual hour - 36,000) = $ -96,000
so we have 36000- actual hour = 96000 / 8
= 36000 - actual hour = 12000
actual hour = 36000-12000 = 24000 hours
so actual variable overhead rate per machine hour = 324,000 / 24000 = $13.50 per machine hour
C- actual Unit of Production :-
actual hours of work = 24,000 hours
standard hours worked = 36,000 hours
standard machine hour required for one unit = 4 hours per unit =
36000 / 4 = 9000 units actual production.
d. actual machine hour per unit =
total hours required = 24,000
total units produced = 9000
rate = 24000 / 9000 = 2.67 per machine hour for one unit of production.
E. Total budgeted overhead Flexible for 9000 units
budgeted fixed overhead + budgeted variable overhead ( units * machine hour per unit * machine rate )
= 25000 + (9000 * 4* 8 )
= 25000+ 288000 =$ 313,000
f. Total budgeted overhead = static for 12500 units.
budgeted fixed overhead + budgeted variable overhead ( units * machine hour per unit * machine rate )
= 25000 + (12500 * 4 * 8 )
= 25000 + 400000 = $ 425,000
G. Fixed overhead volume variance =
Absorbed/Applied overhead - Budgeted fixed overhead
Total applied overhead = 408000.
Fixed overhead applied = 408000 - 324000 = $84000
volume variance =
84000 - 25000 = 59,000 ( favorable )
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.