The Bartok Company Uses a Standard Cost Accounting System and Estimates

Essay

The Bartok Company uses a standard cost accounting system and estimates production for the year to be 60,000 units. At this volume, the company's variable overhead costs are $0.50 per direct labor hour.
The company's single product has a standard cost of $30.00 per unit. Included in the $30.00 is $13.20 for direct materials (3 yards) and $12.00 of direct labor (2 hours). Production information for the month of March follows:
$$\begin{array} { l r } \text { Number of units produced } & 6,000 \\\text { Materials purchased (18,500yards) } & \$ 88,800 \\\text { Materials used in production (yards) } & 18,500 \\\text { Variable overhead costs incurred } & \$ 6,380 \\\text { Fixed overhead costs incured } & \$ 20,400 \\\text { Direct labor cost incurred (\$6.50/hour) } & \$ 75,400\end{array}$$
Required:
(Be sure to indicate whether the variances are favorable or unfavorable.)
a. Compute the predetermined overhead rate used for the year
b. Compute the budgeted fixed costs for the month.
c. Compute the variable overhead spending variance.
d. Compute the variable overhead efficiency variance.
e. Compute the fixed overhead spending (budget) variance.
f. Compute the production volume variance.