Standard Standard Price Quantity 1.5 lbs.S 1.60 per lb 1.5 hrs. $ 12.00 per hr S

Question

Standard Standard Price Quantity 1.5 lbs.S 1.60 per lb 1.5 hrs. $ 12.00 per hr Standard Unit Cost $ 2.40 18.00 (Rate) Direct materials (clay) Direct labor Variable manufacturing overhead (based on 1.5 hrs. S 1.20 per hr 1.80 direct labor hours) Fixed manufacturing overhead ($250,000 2.50 100,000 units) Barley Hopp had the following actual results last year: Number of units produced and sold Number of pounds of clay used Cost of clay Number of labor hours worked Direct labor cost Variable overhead cost Fixed overhead cost 110,00 178,200 $ 267,300 150,000 $2,025,000 $ 200,000 $ 270,000

Explanation / Answer

Answer 1 Fixed Overhead spending variance = Actual Fixed overheads - Budgeted Fixed overheads Fixed Overhead spending variance = $270000 - $250000 = $20000 U Answer 2 Fixed Overhead volume variance = Absorbed Fixed overheads - Budgeted Fixed Overheads Absorbed Fixed overheads = Actual Output in units * Standard Fixed Overhead Absorption Rate per unit Absorbed Fixed overheads = 110000*$2.50 = $2,75,000 Budgeted Fixed Overheads = $250000 Fixed Overhead volume variance = $275000 - $250000 = $25000 F Answer 3 Overapplied fixed manufacturing overheads = Absorbed Fixed overheads - Actual Fixed Overheads = $275000 - $270000 = $5000 $5000 Fixed Overheads Overapplied

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