Understanding Relationships between Overhead Variances, Budgeted Amounts, and Ac
ID: 2553754 • Letter: U
Question
Understanding Relationships between Overhead Variances, Budgeted Amounts, and Actual Units Produced and Direct Labor Hours Worked Last year, Gladner Company had planned to produce 144,500 units. However, 145,945 units were actually produced. The company uses direct labor hours to assign overhead to products. Each unit requires 0.9 standard hour of labor for completion. The fixed overhead rate was $11 per direct labor hour and the variable overhead rate was $6.36 per direct labor hour.
The following variances were computed: Fixed overhead spending variance $24,000 U Variable overhead spending variance $9,196 U
Fixed overhead volume variance 29,700 F Variable overhead efficiency variance 1,272 U
Required:
Round your answers to the nearest whole dollar.
1. Calculate the total applied fixed overhead. $1,444,856
2. Calculate the budgeted fixed overhead. $1,430,550
3. Calculate the actual fixed overhead. $ 1,454,550
4. Calculate the total applied variable overhead. $ 835,389
5. Calculate the number of actual direct labor hours. hrs 131,550
6. Calculate the actual variable overhead. $
I have the answeres for all questions but #6. I have searched chegg on how to solve this but all the other questions are qrong can someone please help me with this thank you
Explanation / Answer
Req 1 Actual output: 145945 units Labour hour per unit: 0.9 Std hours allowwed: (145945 units*0.9 hour): $131,350.50 hours Fixed OH rate per hour: $11 Applied fixed OH: Std horus allowed * OH rate 131350.50 *11 = $1444,856 Req 2&3 Fixed OH volume Variance: Applied fixed OH -Budgeted Fixed OH 29700 = 1444,856 - Budgeted OH Budgeted OH: $1415,156 Fixed OH Spending variance: Budgeted Fixed Oh - Actual Fixed 24000 U = 1415156 - Actual Fixed OH Actual fixed OH = 1439156 Req 4: Variable OH applied: Std hours allowed*Variable OH rate 131350.50*6.36 = $ 835,389 Req 5: Variable OH efficiency variance: Std rate per hour (Std horus-Actual hours) 1272 U = 6.36 (131350.50 -Actual hours) Actual hours= 131550.50 hours Req 6: Variable spending variance: Actual hours (Std rate-Actual rate) 9196 U = 131550.50 (6.36- Actual rate) Actual rate per hour: 6.43 per hour Actual Variable OH cost: 131550.50 hours @6.43 per hour: $ 845,870
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