You Have Just Been Hired as the Controller of the Eastern

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The Answer is Budgeted fixed overhead rate = Fixed overhead ÷ Denominator quantity
= $84,800 ÷ 53,000 direct labor-hours
= $1.60 per direct labor-hour
Actual fixed manufacturing overhead = Budgeted fixed manufacturing overhead + Budget variance
= $84,800 + $7,200
= $92,000
Actual variable overhead = Total actual overhead − Actual fixed manufacturing overhead
= $262,500 − $92,000
= $170,500
Actual variable overhead rate = Actual variable overhead ÷ Actual hours
= $170,500 ÷ 55,000 direct labor-hours
= $3.10 per direct labor-hour
Rate variance = AH (AR − SR)
= 55,000 hours ($3.10 per hour − $3.00 per hour)
= $5,500 U
SH × SR = AH × SR − overhead efficiency variance
= 55,000 hours × $3.00 per hour − $15,000
= $150,000
Standard hours allowed = (SH × SR) ÷ SR
= $150,000 ÷ $3.00 per direct labor-hour
= 50,000 direct labor-hours
Actual units produced = Standard hours allowed ÷ Standard hours per unit
= 50,000 hours ÷ 2 hours per unit
= 25,000 units
Volume variance = Budgeted fixed − (SH × SR)
= $84,800 − (50,000 hours × $1.60 per hour)
= $84,800 − $80,000
= $4,800 U
Summary:

Budgeted fixed overhead rate = Fixed overhead ÷ Denominator quantity = $84,800 ÷ 53,000 direct labor-hours = $1.60 per direct labor-hour Actual fixed manufacturing overhead = Budgeted fixed manufacturing overhead + Budget variance = $84,800 + $7,200 = $92,000 Actual variable overhead = Total actual overhead − Actual fixed manufacturing overhead = $262,500 − $92,000 = $170,500 Actual variable overhead rate = Actual variable overhead ÷ Actual hours = $170,500 ÷ 55,000 direct labor-hours = $3.10 per direct labor-hour Rate variance = AH (AR − SR) = 55,000 hours ($3.10 per hour − $3.00 per hour) = $5,500 U SH × SR = AH × SR − overhead efficiency variance = 55,000 hours × $3.00 per hour − $15,000 = $150,000 Standard hours allowed = (SH × SR) ÷ SR = $150,000 ÷ $3.00 per direct labor-hour = 50,000 direct labor-hours Actual units produced = Standard hours allowed ÷ Standard hours per unit = 50,000 hours ÷ 2 hours per unit = 25,000 units Volume variance = Budgeted fixed − (SH × SR) = $84,800 − (50,000 hours × $1.60 per hour) = $84,800 − $80,000 = $4,800 U Summary:

You Have Just Been Hired as the Controller of the Eastern

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You Have Just Been Hired as the Controller of the Eastern

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Correct Answer:VerifiedShow Answer

Correct Answer:
Verified