Exercise 23-12 Byrd Company produces one product, a putter called GO-Putter. Byr
ID: 2582512 • Letter: E
Question
Exercise 23-12
Byrd Company produces one product, a putter called GO-Putter. Byrd uses a standard cost system and determines that it should take one hour of direct labor to produce one GO-Putter. The normal production capacity for this putter is 115,000 units per year. The total budgeted overhead at normal capacity is $747,500 comprised of $230,000 of variable costs and $517,500 of fixed costs. Byrd applies overhead on the basis of direct labor hours.
During the current year, Byrd produced 81,700 putters, worked 95,000 direct labor hours, and incurred variable overhead costs of $132,763 and fixed overhead costs of $479,050.
Variable
Fixed
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Exercise 23-12
Byrd Company produces one product, a putter called GO-Putter. Byrd uses a standard cost system and determines that it should take one hour of direct labor to produce one GO-Putter. The normal production capacity for this putter is 115,000 units per year. The total budgeted overhead at normal capacity is $747,500 comprised of $230,000 of variable costs and $517,500 of fixed costs. Byrd applies overhead on the basis of direct labor hours.
During the current year, Byrd produced 81,700 putters, worked 95,000 direct labor hours, and incurred variable overhead costs of $132,763 and fixed overhead costs of $479,050.
Variable
Fixed
Predetermined Overhead Rate $ $ Compute the applied overhead for Byrd for the year.Overhead Applied $ Compute the total overhead variance.
Total Overhead Variance $
Neither favorable nor unfavorableUnfavorableFavorable
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Explanation / Answer
Predetermined Overhead Rate : Variable 2 =230000/115000 Fixed 4.5 =517500/115000 2 Overhead Applied =81700*6.5= 531050 3 Total Overhead Variance =(132763+479050)-531050= 80763 Unfavorable
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