A summary of Coastal Equipment's flexible budget for manufacturing overhead follows: Cost Formula Direct Labour - Hours (DLHS) Overhead Costs (per direct labour-hour) 4,400 4,900 5,400 Variable cost $2.20 $9,680 $ 10,780 $11,880 Fixed cost 54,560 54,560 54,560 Total overhead cost $ 64,240 $ 65,340 $ 66,440 The following information is available for a recent period: The denominator activity of 4,400 DLHS was chosen to compute the predetermined overhead rate. At the 4,400 standard DLH level of activity, the company should produce 2,200 units of product. The company's actual operating results were as follows: Number of units produced 2,350 Actual DLHS 4,400 Actual variable overhead costs $9,890 Actual fixed overhead costs $ 54,900 Required: Compute the predetermined overhead rate and break it down into variable and fixed cost elements. Note: Round your answers to 2 decimal places. What were the standard hours allowed for the year's actual output? Note: Do not round intermediate calculations. Compute the variable overhead spending and efficiency variances and the fixed overhead budget and volume variances. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).
A summary of Coastal Equipment's flexible budget for manufacturing overhead follows: Cost Formula Direct Labour - Hours (DLHS) Overhead Costs (per direct labour-hour) 4,400 4,900 5,400 Variable cost $2.20 $9,680 $ 10,780 $11,880 Fixed cost 54,560 54,560 54,560 Total overhead cost $ 64,240 $ 65,340 $ 66,440 The following information is available for a recent period: The denominator activity of 4,400 DLHS was chosen to compute the predetermined overhead rate. At the 4,400 standard DLH level of activity, the company should produce 2,200 units of product. The company's actual operating results were as follows: Number of units produced 2,350 Actual DLHS 4,400 Actual variable overhead costs $9,890 Actual fixed overhead costs $ 54,900 Required: Compute the predetermined overhead rate and break it down into variable and fixed cost elements. Note: Round your answers to 2 decimal places. What were the standard hours allowed for the year's actual output? Note: Do not round intermediate calculations. Compute the variable overhead spending and efficiency variances and the fixed overhead budget and volume variances. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:A summary of Coastal Equipment's flexible budget for manufacturing overhead follows:
Cost
Formula Direct Labour - Hours (DLHS)
Overhead Costs (per direct labour-hour) 4,400 4,900 5,400
Variable cost $2.20 $9,680 $ 10,780 $11,880
Fixed cost 54,560 54,560 54,560
Total overhead cost $ 64,240 $ 65,340 $ 66,440
The following information is available for a recent period:
The denominator activity of 4,400 DLHS was chosen to compute the predetermined overhead rate.
At the 4,400 standard DLH level of activity, the company should produce 2,200 units of product.
The company's actual operating results were as follows:
Number of units produced 2,350
Actual DLHS 4,400
Actual variable overhead costs $9,890
Actual fixed overhead costs $ 54,900
Required:
Compute the predetermined overhead rate and break it down into variable and fixed cost elements.
Note: Round your answers to 2 decimal places.
What were the standard hours allowed for the year's actual output?
Note: Do not round intermediate calculations.
Compute the variable overhead spending and efficiency variances and the fixed overhead budget and volume variances.
Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Indicate the effect of each
variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).
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