Everjoice Company makes clocks. The budgeted fixed overhead costs for 2012 totaled $720,000. The company uses direct labor hours to allocated fixed overhead and it takes 0.5 direct labor hours per clock. The budgeted quantity of clocks (output) planned for the year was 480,000 units. During the year, 504,000 clocks were produced and $780,000 was spent on fixed overhead. A. What is the fixed overhead rate (FOH rate) for 2012 based on direct labor hours? B. The production volume variance for 2012 is (include the amount and write out favorable or unfavorable):
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question:
Everjoice Company makes clocks. The budgeted fixed
A. What is the fixed overhead rate (FOH rate) for 2012 based on direct labor hours?
B. The production volume variance for 2012 is (include the amount and write out favorable or unfavorable):
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