ACME manufacturing is a low-cost producer of a single, commodity product: RGL-01. Standard overhead cost information for one unit of this product is presented below: Standard number of machine hours per unit produced Standard variable overhead rate per machine hour Budgeted fixed overhead (for the year) Practical capacity, in units (annual basis) Budgeted output for the coming year, in units. Normal capacity, in units (per year). Actual production for the year (in units) Actual overhead costs incurred during the year: Fixed overhead Variable overhead Actual number of machine hours per unit for work done this period 1. Fixed overhead application rate 2. Total overhead application rate 3. Total overhead variance for the year Budgeted Output Required: 1. Calculate the fixed overhead application rate per machine hour using (a) budgeted output, (b) normal capacity, and (c) practical capacity. (Round your answers to 2 decimal places.) 2. What is the total overhead application rate per machine hour for each of the three choices identified in requirement 1? (Round your answers to 2 decimal places.) 3. What is the total overhead variance for the year when the overhead application rate per machine hour is determined under each of the following options: (a) budgeted output, (b) normal capacity, and (c) practical capacity? Indicate whether each variance is favorable (F) or unfavorable (U). (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) per machine hour per machine hour Normal Capacity 0.5 $ 30.00 $ 500,000 10,000 8,000 9,000 9,200 $ 480,000 $ 146,600 0.49 per machine hour per machine hour Practical Capacity per machine hour per machine hour

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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ACME manufacturing is a low-cost producer of a single, commodity product: RGL-01. Standard overhead cost information
for one unit of this product is presented below:
Standard number of machine hours per unit produced
Standard variable overhead rate per machine hour
Budgeted fixed overhead (for the year)
Practical capacity, in units (annual basis)
Budgeted output for the coming year, in units
Normal capacity, in units (per year)
Actual production for the year (in units)
Actual overhead costs incurred during the year:
Fixed overhead
Variable overhead
Actual number of machine hours per unit for work done this period
1. Fixed overhead application rate
2. Total overhead application rate
3. Total overhead variance for the year
Required:
1. Calculate the fixed overhead application rate per machine hour using (a) budgeted output, (b) normal capacity, and (c) practical
capacity. (Round your answers to 2 decimal places.)
2. What is the total overhead application rate per machine hour for each of the three choices identified in requirement 1? (Round your
answers to 2 decimal places.)
3. What is the total overhead variance for the year when the overhead application rate per machine hour is determined under each of
the following options: (a) budgeted output, (b) normal capacity, and (c) practical capacity? Indicate whether each variance is favorable
(F) or unfavorable (U). (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)
Budgeted Output
per machine hour
per machine hour
0.5
$ 30.00
$ 500,000
10,000
8,000
9,000
9,200
Normal Capacity
$ 480,000
$ 146,600
0.49
per machine hour
per machine hour
Practical Capacity
per machine hour
per machine hour
Transcribed Image Text:ACME manufacturing is a low-cost producer of a single, commodity product: RGL-01. Standard overhead cost information for one unit of this product is presented below: Standard number of machine hours per unit produced Standard variable overhead rate per machine hour Budgeted fixed overhead (for the year) Practical capacity, in units (annual basis) Budgeted output for the coming year, in units Normal capacity, in units (per year) Actual production for the year (in units) Actual overhead costs incurred during the year: Fixed overhead Variable overhead Actual number of machine hours per unit for work done this period 1. Fixed overhead application rate 2. Total overhead application rate 3. Total overhead variance for the year Required: 1. Calculate the fixed overhead application rate per machine hour using (a) budgeted output, (b) normal capacity, and (c) practical capacity. (Round your answers to 2 decimal places.) 2. What is the total overhead application rate per machine hour for each of the three choices identified in requirement 1? (Round your answers to 2 decimal places.) 3. What is the total overhead variance for the year when the overhead application rate per machine hour is determined under each of the following options: (a) budgeted output, (b) normal capacity, and (c) practical capacity? Indicate whether each variance is favorable (F) or unfavorable (U). (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) Budgeted Output per machine hour per machine hour 0.5 $ 30.00 $ 500,000 10,000 8,000 9,000 9,200 Normal Capacity $ 480,000 $ 146,600 0.49 per machine hour per machine hour Practical Capacity per machine hour per machine hour
Required information [The following information applies to the questions displayed below.] ACME manufacturing is a low-cost producer of a single, commodity product: RGL-01. Standard
overhead cost information for one unit of this product is presented below: Required: 1. Calculate the fixed overhead application rate per machine hour using (a) budgeted output, (b)
normal capacity, and (c) practical capacity. (Round your answers to 2 decimal places.) 2. What is the total overhead application rate per machine hour for each of the three choices identified
in requirement 1 ? (Round your answers to 2 decimal places.) 3. What is the total overhead varlance for the year when the overhead application rate per machine hour is determined under
each of the following options: (a) budgeted output, (b) normal capacity, and (c) practical capacity? Indicate whether each variance is favorable (F) or unfavorable (U), (Do not round
intermediate calculations. Round your answers to the nearest whole dollar amount.) ACME manufacturing is a low-cost producer of a single, commodity product: RGL-01. Standard
overhead cost information for one unit of this product is presented below: Standard number of machine hours per unit produced standard variable overhead rate per machine hour Budgeted
fixed overhead (for the year) Practical capacity, in units (annual basis) Budgeted output for the coming year, in units Normal capacity, in units (per year) Actual production for the year (in
units) Actual overhead costs incurred during the year: Fixed overhead Variable overhead Actual number of machine hours per unit for work done this period Required: Calculate the fixed
overhead application rate per machine hour using (a) budgeted output, (b) normal capacity, and (c) practical capacity. (Round your answers to 2 decimal places.) What is the total overhead
application rate per machine hour for each of the three choices identified in requirement 1 ? (Round your answers to 2 decimal places.) What is the total overhead variance for the year when
the overhead application rate per machine hour is determined under each of the following options: (a) budgeted output, (b) normal capacity, and (c) practical capacity? Indicate whether
each variance is favorable (F) or unfavorable (U). (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)
Transcribed Image Text:Required information [The following information applies to the questions displayed below.] ACME manufacturing is a low-cost producer of a single, commodity product: RGL-01. Standard overhead cost information for one unit of this product is presented below: Required: 1. Calculate the fixed overhead application rate per machine hour using (a) budgeted output, (b) normal capacity, and (c) practical capacity. (Round your answers to 2 decimal places.) 2. What is the total overhead application rate per machine hour for each of the three choices identified in requirement 1 ? (Round your answers to 2 decimal places.) 3. What is the total overhead varlance for the year when the overhead application rate per machine hour is determined under each of the following options: (a) budgeted output, (b) normal capacity, and (c) practical capacity? Indicate whether each variance is favorable (F) or unfavorable (U), (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) ACME manufacturing is a low-cost producer of a single, commodity product: RGL-01. Standard overhead cost information for one unit of this product is presented below: Standard number of machine hours per unit produced standard variable overhead rate per machine hour Budgeted fixed overhead (for the year) Practical capacity, in units (annual basis) Budgeted output for the coming year, in units Normal capacity, in units (per year) Actual production for the year (in units) Actual overhead costs incurred during the year: Fixed overhead Variable overhead Actual number of machine hours per unit for work done this period Required: Calculate the fixed overhead application rate per machine hour using (a) budgeted output, (b) normal capacity, and (c) practical capacity. (Round your answers to 2 decimal places.) What is the total overhead application rate per machine hour for each of the three choices identified in requirement 1 ? (Round your answers to 2 decimal places.) What is the total overhead variance for the year when the overhead application rate per machine hour is determined under each of the following options: (a) budgeted output, (b) normal capacity, and (c) practical capacity? Indicate whether each variance is favorable (F) or unfavorable (U). (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)
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