Weller Company's variable manufacturing overhead should be $1.10per standard machine-hour and its fixed manufacturing overheadshould be $24,633 per month. The following information is availablefor a recent month:
a. The denominator activity of 7,140 machine-hours was chosen tocompute the predetermined overhead rate.
b. At the 7,140 standard machine-hours level of activity, the companyshould produce 3,400 units of product.
c. The company%u2019s actual operating results were as follows:
Number of units produced 4,680 Actual machine-hours 8,040 Actual variable manufacturing overhead cost $ 10,050 Actual fixed manufacturing overhead cost $ 26,900
Required:
1. Compute the predetermined overhead rate and break it down intovariable and fixed cost elements.(Round your answers to2 decimal places. Omit the "$" sign in yourresponse.)
Predetermined overhead rate $ per MH Variable element $ per MH Fixed element $ per MH
2. What were the standard hours allowed for the year%u2019s actualoutput? (Round yourintermediate calculations to 2 decimal places.)
Standard hours MHs
3. Compute the variable overhead rate and efficiency variances and thefixed overhead budget and volume variances. (Input all amounts aspositive values. Indicate the effect of each variance by selecting"F" for favorable, "U" for unfavorable, and "None" for no effect(i.e., zero variance). Round your intermediate calculations andfinal answers to 2 decimal places. Omit the "$" sign in yourresponse.)
Variable overhead rate variance $ (Click toselect)FUNone Variable overhead efficiency variance $ (Click toselect)FUNone Fixed overhead budget variance $ (Click toselect)FUNone Volume variance $ (Click toselect)FUNone
Weller Company's variable manufacturing overhead should be $1.10per standard machine-hour and its fixed manufacturing overheadshould be $24,633 per month. The following information is availablefor a recent month: |
| a. | The denominator activity of 7,140 machine-hours was chosen tocompute the predetermined overhead rate. |
| b. | At the 7,140 standard machine-hours level of activity, the companyshould produce 3,400 units of product. |
| c. | The company%u2019s actual operating results were as follows: |
| Number of units produced | 4,680 | |
| Actual machine-hours | 8,040 | |
| Actual variable manufacturing overhead cost | $ | 10,050 |
| Actual fixed manufacturing overhead cost | $ | 26,900 |
| Required: |
| 1. | Compute the predetermined overhead rate and break it down intovariable and fixed cost elements.(Round your answers to2 decimal places. Omit the "$" sign in yourresponse.) |
| Predetermined overhead rate | $ | per MH |
| Variable element | $ | per MH |
| Fixed element | $ | per MH |
| 2. | What were the standard hours allowed for the year%u2019s actualoutput? (Round yourintermediate calculations to 2 decimal places.) |
| Standard hours | MHs |
| 3. | Compute the variable overhead rate and efficiency variances and thefixed overhead budget and volume variances. (Input all amounts aspositive values. Indicate the effect of each variance by selecting"F" for favorable, "U" for unfavorable, and "None" for no effect(i.e., zero variance). Round your intermediate calculations andfinal answers to 2 decimal places. Omit the "$" sign in yourresponse.) |
| Variable overhead rate variance | $ | (Click toselect)FUNone |
| Variable overhead efficiency variance | $ | (Click toselect)FUNone |
| Fixed overhead budget variance | $ | (Click toselect)FUNone |
| Volume variance | $ | (Click toselect)FUNone |
| | ||
Related questions
Rogen Corporation manufactures a single product. The standard cost per unit of product is shown below.
| Direct materialsâ1 pound plastic at $6 per pound | $ 6.00 | |
| Direct laborâ2.00 hours at $11.15 per hour | 22.30 | |
| Variable manufacturing overhead | 14.00 | |
| Fixed manufacturing overhead | 18.00 | |
| Total standard cost per unit | $60.30 |
The predetermined manufacturing overhead rate is $16 per direct labor hour ($32.00 ÷ 2.00). It was computed from a master manufacturing overhead budget based on normal production of 12,000 direct labor hours (6,000 units) for the month. The master budget showed total variable costs of $84,000 ($7.00 per hour) and total fixed overhead costs of $108,000 ($9.00 per hour). Actual costs for October in producing 4,100 units were as follows.
| Direct materials (4,250 pounds) | $ 26,350 | |
| Direct labor (8,070 hours) | 92,402 | |
| Variable overhead | 99,710 | |
| Fixed overhead | 33,590 | |
| Total manufacturing costs | $252,052 |
The purchasing department buys the quantities of raw materials that are expected to be used in production each month. Raw materials inventories, therefore, can be ignored.
(a)
Compute all of the materials and labor variances. (Round answers to 0 decimal places, e.g. 125.)
(b)
Compute the total overhead variance.
