The answer I have is in coorect. Can someone show me how to work this problem. T

Question

The answer I have is in coorect. Can someone show me how to work this problem. Thanks

Overhead Application, Fixed and Variable Overhead Variances

Chesley Company is planning to produce 2,500,000 power drills for the coming year. The company uses direct labor hours to assign overhead to products. Each drill requires 0.7 standard hour of labor for completion. The total budgeted overhead was $1,980,600. The total fixed overhead budgeted for the coming year is $1,325,800. Predetermined overhead rates are calculated using expected production, measured in direct labor hours. Actual results for the year are:

Required:

Calculate the fixed overhead spending variance. Do not round intermediate calculations. If required, round final answer to the nearest cent.
$3798000 (Unfavorable) is coorect not dollar amount

Actual production (units) 2,570,000   Actual variable overhead $644,500 Actual direct labor hours (AH) 1,536,100   Actual fixed overhead $1,370,000

Explanation / Answer

Fixed Overhead spending variance = Actual overhead - Budgeted overhead

= 1370000-1325800 i.e 44200 Adverse

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.