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Brief Exercise 11-7 Computing Fixed Overhead Variances (LO2- CC11, 12) Primara Corporation has a standard costing system in which it applies overhead to products on the basis of the standard direct labour- hours allowed for the actual output of the period. Data concerning the most recent year appear below: Total budgeted fixed overhead cost for the year Actual fixed overhead cost for the year Budgeted standard direct labour-hours (denominator level of activity) Actual direct labour-hours Standard direct labour-hours allowed for the actual output Required: 1. Compute the fixed portion of the predetermined overhead rate for the year. Predetermined overhead rate per DLH Fixed overhead budget variance Fixed overhead volume variance $ 500,000 $ 508,000 50,000 54,000 52,000 2. Compute the fixed overhead budget variance and volume variance. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)

Brief Exercise 11-7 Computing Fixed Overhead Variances (LO2- CC11, 12) Primara Corporation has a standard costing system in which it applies overhead to products on the basis of the standard direct labour- hours allowed for the actual output of the period. Data concerning the most recent year appear below: Total budgeted fixed overhead cost for the year Actual fixed overhead cost for the year Budgeted standard direct labour-hours (denominator level of activity) Actual direct labour-hours Standard direct labour-hours allowed for the actual output Required: 1. Compute the fixed portion of the predetermined overhead rate for the year. Predetermined overhead rate per DLH Fixed overhead budget variance Fixed overhead volume variance $ 500,000 $ 508,000 50,000 54,000 52,000 2. Compute the fixed overhead budget variance and volume variance. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Brief Exercise 11-7 Computing Fixed Overhead Variances (LO2- CC11, 12) Primara Corporation has a standard costing system in which it applies overhead to products on the basis of the standard direct labour- hours allowed for the actual output of the period. Data concerning the most recent year appear below: Total budgeted fixed overhead cost for the year Actual fixed overhead cost for the year Budgeted standard direct labour-hours (denominator level of activity) Actual direct labour-hours Standard direct labour-hours allowed for the actual output Required: 1. Compute the fixed portion of the predetermined overhead rate for the year. Predetermined overhead rate per DLH Fixed overhead budget variance Fixed overhead volume variance $ 500,000 $ 508,000 50,000 54,000 52,000 2. Compute the fixed overhead budget variance and volume variance. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)
Transcribed Image Text:Brief Exercise 11-7 Computing Fixed Overhead Variances (LO2- CC11, 12) Primara Corporation has a standard costing system in which it applies overhead to products on the basis of the standard direct labour- hours allowed for the actual output of the period. Data concerning the most recent year appear below: Total budgeted fixed overhead cost for the year Actual fixed overhead cost for the year Budgeted standard direct labour-hours (denominator level of activity) Actual direct labour-hours Standard direct labour-hours allowed for the actual output Required: 1. Compute the fixed portion of the predetermined overhead rate for the year. Predetermined overhead rate per DLH Fixed overhead budget variance Fixed overhead volume variance $ 500,000 $ 508,000 50,000 54,000 52,000 2. Compute the fixed overhead budget variance and volume variance. (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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