Required: 1. Compute the applied fixed overhead. 2. Compute the fixed overhead spending and volume variances. Enter amounts as positive numbers and select Favorable or Unfavorable. Spending variance Volume variance

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Overhead Application, Fixed and Variable Overhead Variances
Zepol Company is planning to produce 600,000 power drills for the coming year. The company uses direct labor
hours to assign overhead to products. Each drill requires 0.75 standard hour of labor for completion. The total
budgeted overhead was $1,777,500. The total fixed overhead budgeted for the coming year is $832,500.
Predetermined overhead rates are calculated using expected production, measured in direct labor hours. Actual
results for the year are:
Actual production (units)
Actual direct labor hours (AH) 446,000
Required:
1. Compute the applied fixed overhead.
594,000 Actual variable overhead $928,000
Actual fixed overhead $835,600
2. Compute the fixed overhead spending and volume variances. Enter amounts as positive numbers and select
Favorable or Unfavorable.
Spending variance $
Volume variance
Transcribed Image Text:Overhead Application, Fixed and Variable Overhead Variances Zepol Company is planning to produce 600,000 power drills for the coming year. The company uses direct labor hours to assign overhead to products. Each drill requires 0.75 standard hour of labor for completion. The total budgeted overhead was $1,777,500. The total fixed overhead budgeted for the coming year is $832,500. Predetermined overhead rates are calculated using expected production, measured in direct labor hours. Actual results for the year are: Actual production (units) Actual direct labor hours (AH) 446,000 Required: 1. Compute the applied fixed overhead. 594,000 Actual variable overhead $928,000 Actual fixed overhead $835,600 2. Compute the fixed overhead spending and volume variances. Enter amounts as positive numbers and select Favorable or Unfavorable. Spending variance $ Volume variance
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