Sprint 4:06 PM ezto.mheducation.com Primara Corporation has a standard cost syst

Question

Sprint 4:06 PM ezto.mheducation.com 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: $453,600 Total budgeted fixed overhead cost for the year Actual fixed overhead cost for the year Budgeted standard direct labor-hours (denominator Actual direct labor-hours Standard direct labor-hours allowed for the actual $448.000 54,000 55.000 52.000 level of activity) output Required Compute the fixed portion of the predetermined overhead rate for the year. (Round Fixed portion of the predetermined overhead rate to 2 decimal places.) Fixed overhead Denominator level of activity Fixed portion of the rate 2 Compute the fixed overhead budget variance and volume variance. (Round Fixed portion of the predetermined overhead rate to 2 decimal places. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.)) Actual fxed overhead cost for the year Budgeted fixed overhead cost Budget variance Denominator hours Standard hours allowed Volume variance per DLH DLHs DLHs

Explanation / Answer

Fixed overhead (a) $ 453600

Denominator level (b) 54000

Fixed portion of predertimed rate (a/b)= 8.4

B. Fixed overhead budget variance:

Actual fixed overhead cost for the year $ 448000

(-) Budgeted fixed overhead cost (52000 *8.4) $ 436800

Variance . 11200 A

C Fixed portion of predermined rate 8.4

Denominator hours. 55000 DLH

Standard hours. 52000 DLH

Variance . 8.4 ( 55000-52000)

25200

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