NORTH CAROLINA CORP The following information is available regarding the company

Question

NORTH CAROLINA CORP

The following information is available regarding the company’s overhead. The company uses standard costing to account for both variable and fixed overhead in its operations, both of which are applied on the basis of machine hours.

Required:

Determine the following:

1. Variable manufacturing overhead incurred

2. Standard machine hours allowed for actual output

3. Fixed overhead rate (per machine hour)

4. Budgeted variable overhead (per master budget)

5. Total budgeted overhead (per master budget)

6. Applied variable overhead

7. Applied fixed overhead

8. Fixed overhead spending variance

9. Actual machine hours used

23,180 Fixed manufacturing overhead incurred Denominator machine hours per master budget Variable overhead rate (per machine hour) Budgeted fixed overhead per master budget Fixed overhead volume variance Variable overhead spending variance Variable overhead efficiency variance 1,000 hours 42 per machine hour 20,000 4,000 F 2,282 F 2,478 f

Explanation / Answer

Fixed Overhead volume variance= Fixed Overhead absorbed- Budgeted

4000= FOH absorbed- 20000

7)F OH Absorbed = 24000

FIXEd Overhead spending variance = Fixed Overhead incurred- Budgeted Overhead

= 23180- 20000

= 3180 A

1) variable overhead spending variance = variable overhead incurred- budgeted

-2282 = incurred -42000

Incurred = 39718

Thus fixed overhead applied = 24000

3) Fixed Overhead rate = 24000/ 1000

= 24 per machine hour

4) Budgeted variable Overhead= variable Overhead per machine hr * machine hour per budget

= 42*1000 =42000

5) total budgeted Overhead= variable + Fixed Overhead

= 42000+24000= 66000

Related Questions

Navigate

• Browse (All)
• Browse N
• Subjects

---

---

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