Norwall Company's budgeted variable manufacturing overhead cost is $1.30 per machine-hour and its budgeted fixed manufacturing overhead is $30,368 per month. The following information is available for a recent month: 1. The denominator activity of 8,320 machine-hours is used to compute the predetermined overhead rate. 2. At a denominator activity of 8,320 machine-hours, the company should produce 3,200 units of product. 3. The company's actual operating results were: Number of units produced Actual machine-hours. Actual variable manufacturing overhead cost Actual fixed manufacturing overhead cost $ $ 3,690 9,700 11.155 35,000 Required: 1. Compute the predetermined overhead rate and break it down into variable and fixed cost elements. (Round your answers to 2 decimal places.) 2. Compute the standard hours allowed for the actual production. 3. Compute the variable overhead rate and efficiency variances and the fixed overhead budget and volume variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Round your intermediate calculations and final answers to 2 decimal places.)
Norwall Company's budgeted variable manufacturing overhead cost is $1.30 per machine-hour and its budgeted fixed manufacturing overhead is $30,368 per month. The following information is available for a recent month: 1. The denominator activity of 8,320 machine-hours is used to compute the predetermined overhead rate. 2. At a denominator activity of 8,320 machine-hours, the company should produce 3,200 units of product. 3. The company's actual operating results were: Number of units produced Actual machine-hours. Actual variable manufacturing overhead cost Actual fixed manufacturing overhead cost $ $ 3,690 9,700 11.155 35,000 Required: 1. Compute the predetermined overhead rate and break it down into variable and fixed cost elements. (Round your answers to 2 decimal places.) 2. Compute the standard hours allowed for the actual production. 3. Compute the variable overhead rate and efficiency variances and the fixed overhead budget and volume variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Round your intermediate calculations and final answers to 2 decimal places.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
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.
Topic Video
Question
Please do not give solution in image format thanku
Transcribed Image Text:Norwall Company's budgeted variable manufacturing overhead cost is $1.30 per machine-hour and its budgeted fixed manufacturing
overhead is $30,368 per month.
The following information is available for a recent month:
1. The denominator activity of 8,320 machine-hours is used to compute the predetermined overhead rate.
2. At a denominator activity of 8,320 machine-hours, the company should produce 3,200 units of product.
3. The company's actual operating results were:
Number of units produced
Actual machine-hours
Actual variable manufacturing overhead cost
Actual fixed manufacturing overhead cost
$
$
3,690
9,700
11,155
35,000
Required:
1. Compute the predetermined overhead rate and break it down into variable and fixed cost elements. (Round your answers to 2
decimal places.)
2. Compute the standard hours allowed for the actual production.
3. Compute the variable overhead rate and efficiency variances and the fixed overhead budget and volume variances. (Indicate the
effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all
amounts as positive values. Round your intermediate calculations and final answers to 2 decimal places.)
1. Predetermined overhead rate
Variable element
Fixed element
2. Standard hours allowed for the actual production
3. Variable overhead rate variance
Variable overhead efficiency variance
Fixed overhead budget variance
Fixed overhead volume variance
per MH
per MH
per MH
MHS
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 8 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education