Rostad Corporation applies manufacturing overhead to products on the basis of st

Question

Rostad Corporation applies manufacturing overhead to products on the basis of standard machine-hours. Budgeted and actual overhead costs for the most recent month appear below: Original Budget Actual Costs Variable overhead costs: Supplies $6,000 $6,190 Indirect labor 10,540 9,890 Fixed overhead costs: Supervision 13,810 14,310 Utilities 13,100 13,150 Factory depreciation 55,440 54,890 Total overhead costs $98,890 $98,430 The company based its original budget on 6,100 machine-hours. The company actually worked 6,060 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 5,990 machine-hours. What was the overall fixed manufacturing overhead volume variance for the month?

Explanation / Answer

Fixed manufacturing overhead volume variance = Budgeted fixed overhead - Standard fixed overhead

                                                                                        = 82350 - 80865

                                                                                         = 1485 (U)

**Budgeted Fixed overhead= 13810 + 13100 +55440 = 82350

**Fixed overhead per hour = 82350 / 6100 = $ 13.5 per machine hour

Standard fixed overhead =standard hour* overhead rate

                                          = 5990 * 13.5

                                           = $ 80865

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

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