allowed for actual output of the period. During the recent year, the following data were collected: Total budgeted fixed overhead cost for the year Budgeted standard direct labour-hours Actual fixed overhead cost for the year Actual direct labour-hours Standard direct labour-hours allowed for the actual output $109,720 $106,520 21,100 22,500 19,600 Required 1. Compute the fixed portion of the predetermined overhead rate for the year. (Round your answer to 2 decimal places.) Predetermined overhead rate per DLH 2. Compute the fixed overhead budget and volume variances. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (l.e., zero varlance).) Fixed overhead budget variance Fixed overhead volume variance
allowed for actual output of the period. During the recent year, the following data were collected: Total budgeted fixed overhead cost for the year Budgeted standard direct labour-hours Actual fixed overhead cost for the year Actual direct labour-hours Standard direct labour-hours allowed for the actual output $109,720 $106,520 21,100 22,500 19,600 Required 1. Compute the fixed portion of the predetermined overhead rate for the year. (Round your answer to 2 decimal places.) Predetermined overhead rate per DLH 2. Compute the fixed overhead budget and volume variances. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (l.e., zero varlance).) Fixed overhead budget variance Fixed overhead volume variance
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 30P: Primera Company produces two products and uses a predetermined overhead rate to apply overhead....
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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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Question
![Happy Valley Pet Products uses a standard costing system that applies overhead to products based on standard direct labour-hours
allowed for actual output of the period. During the recent year, the following data were collected:
Total budgeted fixed overhead cost for the year
Actual fixed overhead cost for the year
Budgeted standard direct labour-hours
Actual direct labour-hours
Standard direct labour-hours allowed for the actual output
$109,720
$106,520
21,100
22,500
19,600
Required:
1. Compute the fixed portion of the predetermined overhead rate for the year. (Round your answer to 2 decimal places.)
Predetermined overhead rate
per DLH
2. Compute the fixed overhead budget and volume variances. (Indicate the effect of each variance by selecting "F" for favourable,
"U" for unfavourable, and "None" for no effect (l.e., zero varlance).)
Fixed overhead budget variance
Fixed overhead volume variance
F
None
U](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbc82f919-9541-4400-a8ad-6a1d3045c477%2F1cf28533-f79b-4357-ac01-8b6eca86aea8%2Fg04zka_processed.png&w=3840&q=75)
Transcribed Image Text:Happy Valley Pet Products uses a standard costing system that applies overhead to products based on standard direct labour-hours
allowed for actual output of the period. During the recent year, the following data were collected:
Total budgeted fixed overhead cost for the year
Actual fixed overhead cost for the year
Budgeted standard direct labour-hours
Actual direct labour-hours
Standard direct labour-hours allowed for the actual output
$109,720
$106,520
21,100
22,500
19,600
Required:
1. Compute the fixed portion of the predetermined overhead rate for the year. (Round your answer to 2 decimal places.)
Predetermined overhead rate
per DLH
2. Compute the fixed overhead budget and volume variances. (Indicate the effect of each variance by selecting "F" for favourable,
"U" for unfavourable, and "None" for no effect (l.e., zero varlance).)
Fixed overhead budget variance
Fixed overhead volume variance
F
None
U
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