1. What were the standard hours allowed for the year's product 2. What was the amount of budgeted fixed overhead cost for t 3. What was the fixed overhead budget variance for the year?
1. What were the standard hours allowed for the year's product 2. What was the amount of budgeted fixed overhead cost for t 3. What was the fixed overhead budget variance for the year?
Chapter1: Financial Statements And Business Decisions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Required:
1. What were the standard hours allowed for the year's production?
2. What was the amount of budgeted fixed overhead cost for the year?
3. What was the fixed overhead budget variance for the year? (Indicate the effect of each variance by selecting "F" for favorable, "U"
for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
4. What denominator activity level did the company use in setting the predetermined overhead rate for the year?
1. Standard hours allowed for the year's production
2. Budgeted fixed overhead cost
3. Budget variance
4. Denominator activity
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DLHS
![Exercise 10A-5 (Algo) Using Fixed Overhead Variances [LO10-4]
The standard cost card for the single product manufactured by Cutter, Incorporated, is given below:
Inputs
Direct materials
Direct labor
Variable overhead
Fixed overhead
Total standard cost per unit
Actual Fixed
Overhead
$57,000
(1)
Standard
Quantity or
Hours
5.2 yards
0.8 hours
0.8 hours
Rate
$5.00 per yard
$ 17.00 per hour
$ 3.50 per hour
0.8 hours $ 6.00 per hour
Manufacturing overhead is applied to production on the basis of standard direct labor-hours. During the year, the company worked
9,640 hours and manufactured 11,800 units of product. Selected data relating to the company's fixed manufacturing overhead cost for
the year are shown below:
Budgeted Fixed
Overhead
7
Budget variance,
$7
(2)
Standard Price or
Fixed Overhead
Applied to
Work in Process
7 hours $7 per hour.
- $7
Standard
Cost
Volume
variance,
$1,440 P
(1) (2)
$26.00
13.60
2.80
4.80
$ 47.20](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F43c802be-3abc-4e72-87a7-d245e0d727a2%2Fd24e4efb-f900-4a52-b731-90076714f968%2F1efe3s5_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 10A-5 (Algo) Using Fixed Overhead Variances [LO10-4]
The standard cost card for the single product manufactured by Cutter, Incorporated, is given below:
Inputs
Direct materials
Direct labor
Variable overhead
Fixed overhead
Total standard cost per unit
Actual Fixed
Overhead
$57,000
(1)
Standard
Quantity or
Hours
5.2 yards
0.8 hours
0.8 hours
Rate
$5.00 per yard
$ 17.00 per hour
$ 3.50 per hour
0.8 hours $ 6.00 per hour
Manufacturing overhead is applied to production on the basis of standard direct labor-hours. During the year, the company worked
9,640 hours and manufactured 11,800 units of product. Selected data relating to the company's fixed manufacturing overhead cost for
the year are shown below:
Budgeted Fixed
Overhead
7
Budget variance,
$7
(2)
Standard Price or
Fixed Overhead
Applied to
Work in Process
7 hours $7 per hour.
- $7
Standard
Cost
Volume
variance,
$1,440 P
(1) (2)
$26.00
13.60
2.80
4.80
$ 47.20
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