You brought your work home one evening, and your nephew spilled his chocolate mi

Question

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 obliterated information from the remaining data. Fill in the missing numbers below. (Round your answer to two decimal places. Indicate the effect of each variance by selecting "Favorable" or "unfavorable". Select "None" and enter"0" for no effect (i.e., zero variance).) Standard machine hours per unit of output Standard variable-overhead rate per machine hour$11.00 Actual variable-overhead rate per machine hour Actual machine hours per unit of output Budgeted fixed overhead Actual fixed overhead Budgeted production in units Actual production in units Variable-overhead spending variance Variable-overhead efficiency variance Fixed-overhead budget variance Fixed-overhead volume variance Total actual overhead Total budgeted overhead (flexible budget) Total budgeted overhead (static budget) Total applied overhead 4 hours $44,800 14,000 $19,500 Unfavorable $ 154,000 Favorable $12,000 Unfavorable nfavorable $ 505,300 $ 625,400

Explanation / Answer

Computation of Actual Fixed Overhead Budgeted Fixed Overhead 44800 Add: Fixed Overhead Budget Variance -12000 Actual Fixed Overhead 32800 Computation of Actual Variable Overhead rate/Machine Hour Total Actual Overhead $505,300 Less: Actual Fixed Overhead $32,800 Actual Variable Overhead $472,500 Budgeted Overhead rate per Machine Hour (a) [Standard variable Rate per Machine Hour +(Budgeted Fixed OH/(Budgeted Prouction in Unit* Standard Machine Hour per Unit)] ($11+($44800/(14000Unit*4 Hour) $11.80 Total Applied Overhead $625,400 Actual Machine Hour= (Total Applied Overhead/BudgetedOverhead rate Per Machine Hour) ($625400/11.8) 53000 Actual Variable Overhead Rate per Machine Hour (Actual Variable Overhead/Actual Hours) ($4725000/53000) $8.92 Computation of ActualProduction In Units Actual Variable Overhead Cost Per Unit (Standard Machine Hour per Unit * Budgeted Overhead rate per Hour) (4 Hour*$11.80) $47.20 Actual Overhead $505,300 Actual Production In Unit (Actual Overhead/Cost per Unit) ($505300/$47.20)           10,706 Computation of Actual Machine Hour per Unit of Output Total Actual Hour 53000 Total Unit 10706 Actual Machine Hour per Unit of Output ( Actual Hour/Total Unit) 5 Hour

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