Cost Management: A Strategic Emphasis 7th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins

Exercise 18

Factory Overhead Analysis-Two, Three, and Four Variances; Spreadsheet Application Walkenhorst Company's machining department prepared its 2016 budget based on the following data:

The department uses machine hours to apply factory overhead. In 2016, the department used 85,000 machine hours and $625,000 in total manufacturing overhead to manufacture 42,000 units. Actual fixed overhead for the year was $375,000.
Required Set up an Excel spreadsheet to determine for the year:
1. The variable, fixed, and total factory overhead application rates.
2. The flexible budget for overhead cost based on output achieved in 2016.
3. The fixed overhead production volume variance.
4. The total overhead spending variance.
5. The overhead efficiency variance.
6. The variable and fixed overhead spending variances.