Manuel Company predicts it will operate at 80% of its productive capacity. Its overhead allocation base is DLH and its standard amount per allocation base is 0.5 DLH per unit. The company reports the following for this period. Production (in units) Overhead Variable overhead Fixed overhead Total overhead Flexible Budget at 80% Capacity 54,250 $ 298,375 54,250 $ 352,625 Actual Results 50,800 $ 361,100 Exercise 8-17 (Algo) Computing standard overhead rate and total overhead variance LO P4 1. Compute the standard overhead rate. Hint: Standard allocation base at 80% capacity is 27,125 DLH, computed as 54,250 units * 0.5 DLH per unit. 2. Compute the standard overhead applied. 3. Compute the total overhead variance. Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no variance. 1. Standard overhead rate 2. Standard overhead applied 3. Overhead variance Shaw Company produced 730 units. Its overhead allocation base is DLH and its standard amount per allocation base is 8 DLH per unit. Its standard overhead rate is $10 per DLH. The flexible overhead budget at an activity level of 730 units shows $28,500 in variable overhead costs and $32,500 in fixed overhead costs. Compute the volume variance. Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no variance. Volume variance Volume Variance
Manuel Company predicts it will operate at 80% of its productive capacity. Its overhead allocation base is DLH and its standard amount per allocation base is 0.5 DLH per unit. The company reports the following for this period. Production (in units) Overhead Variable overhead Fixed overhead Total overhead Flexible Budget at 80% Capacity 54,250 $ 298,375 54,250 $ 352,625 Actual Results 50,800 $ 361,100 Exercise 8-17 (Algo) Computing standard overhead rate and total overhead variance LO P4 1. Compute the standard overhead rate. Hint: Standard allocation base at 80% capacity is 27,125 DLH, computed as 54,250 units * 0.5 DLH per unit. 2. Compute the standard overhead applied. 3. Compute the total overhead variance. Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no variance. 1. Standard overhead rate 2. Standard overhead applied 3. Overhead variance Shaw Company produced 730 units. Its overhead allocation base is DLH and its standard amount per allocation base is 8 DLH per unit. Its standard overhead rate is $10 per DLH. The flexible overhead budget at an activity level of 730 units shows $28,500 in variable overhead costs and $32,500 in fixed overhead costs. Compute the volume variance. Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no variance. Volume variance Volume Variance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Manuel Company predicts it will operate at 80% of its productive capacity. Its overhead allocation base is DLH and its
standard amount per allocation base is 0.5 DLH per unit. The company reports the following for this period.
Production (in units)
Overhead
Variable overhead
Fixed overhead
Total overhead
Flexible Budget at
80% Capacity
54,250
$ 298,375
54,250
$ 352,625
Actual
Results
50,800
$ 361,100
Exercise 8-17 (Algo) Computing standard overhead rate and total overhead variance LO P4
1. Compute the standard overhead rate. Hint: Standard allocation base at 80% capacity is 27,125 DLH, computed as 54,250 units *
0.5 DLH per unit.
2. Compute the standard overhead applied.
3. Compute the total overhead variance.
Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no variance.
1. Standard overhead rate
2. Standard overhead applied
3. Overhead variance
Transcribed Image Text:Shaw Company produced 730 units. Its overhead allocation base is DLH and its standard amount per allocation base is 8 DLH per unit.
Its standard overhead rate is $10 per DLH. The flexible overhead budget at an activity level of 730 units shows $28,500 in variable
overhead costs and $32,500 in fixed overhead costs. Compute the volume variance.
Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no variance.
Volume variance
Volume Variance
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