Centre Black Company planned to produce 40,000 units of product and work at the 100,000 direct labour hours level of activity for 2020. Manufacturing overhead at this level of activity and the predetermined overhead rate is as follows: Predetermined Overhead Rate per Direct Labour Hour Variable manufacturing overhead $600,000 Fixed manufacturing overhead Total manufacturing overhead 300,000 $6 a) Variable overhead budget variance. b) Fixed overhead volume variance. 3 $900,000 At the end of 2020, 44,000 units were actually produced and 107,400 direct labour hours were actually worked. Total actual manufacturing overhead costs were $950,000, of which $610,000 was variable. Instructions Calculate the following variances and indicate whether they are favourable or unfavourable: $9

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Centre Black Company planned to produce
40,000 units of product and work at the
100,000 direct labour hours level of activity for
2020. Manufacturing overhead at this level of
activity and the predetermined overhead rate is
as follows:
Predetermined
Overhead Rate per
Direct Labour Hour
Variable manufacturing
overhead
$600,000
Fixed manufacturing
overhead
300,000
$6
a) Variable overhead budget variance.
b) Fixed overhead volume variance.
3
Total manufacturing
overhead
$900,000
At the end of 2020, 44,000 units were actually
produced and 107,400 direct labour hours were
actually worked. Total actual manufacturing
overhead costs were $950,000, of which
$610,000 was variable.
Instructions
Calculate the following variances and indicate
whether they are favourable or unfavourable:
$9
Transcribed Image Text:Centre Black Company planned to produce 40,000 units of product and work at the 100,000 direct labour hours level of activity for 2020. Manufacturing overhead at this level of activity and the predetermined overhead rate is as follows: Predetermined Overhead Rate per Direct Labour Hour Variable manufacturing overhead $600,000 Fixed manufacturing overhead 300,000 $6 a) Variable overhead budget variance. b) Fixed overhead volume variance. 3 Total manufacturing overhead $900,000 At the end of 2020, 44,000 units were actually produced and 107,400 direct labour hours were actually worked. Total actual manufacturing overhead costs were $950,000, of which $610,000 was variable. Instructions Calculate the following variances and indicate whether they are favourable or unfavourable: $9
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