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Newark Plastics Corporation developed its overhead application rate from the annual budget. The budget is based on an expected total output of 648,000 units requiring 3,240,000 machine hours. The company is able to schedule production uniformly throughout the year. Machine hours is the cost driver for overhead costs. A total of 59,000 units requiring 275,400 machine hours were produced during May. Actual overhead costs for May amounted to $823,800. The actual costs, as compared to the annual budget and to one-twelfth of the annual budget, are as follows: Variable overhead: Indirect material Indirect labor Fixed overhead: Supervision Utilities Depreciation Total NEWARK PLASTICS CORPORATION Annual Budget Total Amount $2,397,600 1,749,600 1,555,200 1,490,400 2,332,800 $9,525,600 Per Unit d. Variable-overhead efficiency variance. e. Fixed-overhead volume variance. $ 3.70 2.70 2.40 2.30 3.60 $14.70 Per Machine Hour $0.74 0.54 0.48 0.46 0.72 $2.94 Required: 1. Prepare a schedule showing the following amounts for Newark Plastics for May. a. Applied overhead costs. b. Variable-overhead spending variance. c. Fixed-overhead budget variance. Monthly Budget $199,800 145,800 129,600 124,200 194,400 $793,800 Actual Costs for May $217,800 145,800 123,600 142,200 194,400 $823,800

Newark Plastics Corporation developed its overhead application rate from the annual budget. The budget is based on an expected total output of 648,000 units requiring 3,240,000 machine hours. The company is able to schedule production uniformly throughout the year. Machine hours is the cost driver for overhead costs. A total of 59,000 units requiring 275,400 machine hours were produced during May. Actual overhead costs for May amounted to $823,800. The actual costs, as compared to the annual budget and to one-twelfth of the annual budget, are as follows: Variable overhead: Indirect material Indirect labor Fixed overhead: Supervision Utilities Depreciation Total NEWARK PLASTICS CORPORATION Annual Budget Total Amount $2,397,600 1,749,600 1,555,200 1,490,400 2,332,800 $9,525,600 Per Unit d. Variable-overhead efficiency variance. e. Fixed-overhead volume variance. $ 3.70 2.70 2.40 2.30 3.60 $14.70 Per Machine Hour $0.74 0.54 0.48 0.46 0.72 $2.94 Required: 1. Prepare a schedule showing the following amounts for Newark Plastics for May. a. Applied overhead costs. b. Variable-overhead spending variance. c. Fixed-overhead budget variance. Monthly Budget $199,800 145,800 129,600 124,200 194,400 $793,800 Actual Costs for May $217,800 145,800 123,600 142,200 194,400 $823,800

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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Newark Plastics Corporation developed its overhead application rate from the annual budget. The budget is based on an expected total output of 648,000 units requiring 3,240,000 machine hours. The company is able to schedule production uniformly throughout the year. Machine hours is the cost driver for overhead costs. A total of 59,000 units requiring 275,400 machine hours were produced during May. Actual overhead costs for May amounted to $823,800. The actual costs, as compared to the annual budget and to one-twelfth of the annual budget, are as follows: Variable overhead: Indirect material Indirect labor Fixed overhead: Supervision Utilities Depreciation Total NEWARK PLASTICS CORPORATION Annual Budget Total Amount $2,397,600 1,749,600 Applied overhead costs 1,555,200 1,490,400 2,332,800 $9,525,600 Per Unit Applied overhead costs. $ 3.70 2.70 2.40 2.30 3.60 $14.70 Per Machine Hour $0.74 0.54 Required: 1. Prepare a schedule showing the following amounts for Newark Plastics for May a. Applied overhead costs. b. Variable-overhead spending variance. c. Fixed-overhead budget variance. d. Variable-overhead efficiency variance. e. Fixed-overhead volume variance. 0.48 0.46 0.72 $2.94 Req 1A Req 1B and 1D Req 1C and 1E Monthly Budget $199,800 145,800 129,600 124,200 194,400 $793,800 Actual Costs for May $217,800 145,800 123,600 142, 200 194,400 $823,800
Transcribed Image Text:Newark Plastics Corporation developed its overhead application rate from the annual budget. The budget is based on an expected total output of 648,000 units requiring 3,240,000 machine hours. The company is able to schedule production uniformly throughout the year. Machine hours is the cost driver for overhead costs. A total of 59,000 units requiring 275,400 machine hours were produced during May. Actual overhead costs for May amounted to $823,800. The actual costs, as compared to the annual budget and to one-twelfth of the annual budget, are as follows: Variable overhead: Indirect material Indirect labor Fixed overhead: Supervision Utilities Depreciation Total NEWARK PLASTICS CORPORATION Annual Budget Total Amount $2,397,600 1,749,600 Applied overhead costs 1,555,200 1,490,400 2,332,800 $9,525,600 Per Unit Applied overhead costs. $ 3.70 2.70 2.40 2.30 3.60 $14.70 Per Machine Hour $0.74 0.54 Required: 1. Prepare a schedule showing the following amounts for Newark Plastics for May a. Applied overhead costs. b. Variable-overhead spending variance. c. Fixed-overhead budget variance. d. Variable-overhead efficiency variance. e. Fixed-overhead volume variance. 0.48 0.46 0.72 $2.94 Req 1A Req 1B and 1D Req 1C and 1E Monthly Budget $199,800 145,800 129,600 124,200 194,400 $793,800 Actual Costs for May $217,800 145,800 123,600 142, 200 194,400 $823,800
Req 18 and 1D Req 1C and 1E Variable-overhead Spending Variance and Efficiency Variance. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "N enter "0" for no effect (i.e., zero variance). Round "Projected Overhead" and "Flexible Budget" to 2 decimal places.) Req 1A Variable Overhead Machine hours Fixed Overhead $ Machine hours Actual Overhead Complete this question by entering your answers in the tabs below. $ Spending Variance Actual Overhead <Reg 1A Budget Variance Flexible Budget Budgeted Overhead at Actual Hours Req 18 and 10 $ $ 0.00 Req 1A Req 18 and 1D Req 1C and 1 Fixed-overhead Budget Variance and Volume Variance. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (ie, zero variance). Round "Applied Overhead" to 2 decimal places.) Req 10 and 1E > Efficiency Variance Volume Variance Beyy 30 and 18 Flexible Budget (Applied Overhead) $ $ $ $ Applied Overhead 0.00 0.00 0 0
Transcribed Image Text:Req 18 and 1D Req 1C and 1E Variable-overhead Spending Variance and Efficiency Variance. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "N enter "0" for no effect (i.e., zero variance). Round "Projected Overhead" and "Flexible Budget" to 2 decimal places.) Req 1A Variable Overhead Machine hours Fixed Overhead $ Machine hours Actual Overhead Complete this question by entering your answers in the tabs below. $ Spending Variance Actual Overhead <Reg 1A Budget Variance Flexible Budget Budgeted Overhead at Actual Hours Req 18 and 10 $ $ 0.00 Req 1A Req 18 and 1D Req 1C and 1 Fixed-overhead Budget Variance and Volume Variance. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (ie, zero variance). Round "Applied Overhead" to 2 decimal places.) Req 10 and 1E > Efficiency Variance Volume Variance Beyy 30 and 18 Flexible Budget (Applied Overhead) $ $ $ $ Applied Overhead 0.00 0.00 0 0
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