The loan department of Calgary Bank uses standard costs to determine the overhead cost of processing loan applications. During the current month, a fire occurred, and the accounting records for the department were mostly destroyed. The following data were salvaged from the ashes.Standard variable overhead rate per hour $9 Standard hours per application 3 Standard hours allowed 4,980 Standard fixed overhead rate per hour $7 Actual fixed overhead cost $35,630 Variable overhead budget based on standard hours allowed $18,300 Fixed overhead budget $35,630 Overhead controllable variance $1,000 U(a)Determine the following.(1) Total actual overhead cost $ (2) Actual variable overhead cost $ (3) Variable overhead costs applied $ (4) Fixed overhead costs applied $ (5) Overhead volume variance $ (b)Determine how many loans were processed.

Total overhead cost = Standard fixed overhead + Standard variable overhead + overhead…

Answered: The loan department of Calgary Bank…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The loan department of Calgary Bank uses standard costs to determine the overhead cost of processing loan applications. During the current month, a fire occurred, and the accounting records for the department were mostly destroyed. The following data were salvaged from the ashes.

Standard variable overhead rate per hour	$9
Standard hours per application	3
Standard hours allowed	4,980
Standard fixed overhead rate per hour	$7
Actual fixed overhead cost	$35,630
Variable overhead budget based on standard hours allowed	$18,300
Fixed overhead budget	$35,630
Overhead controllable variance	$1,000	U

(a)

Determine the following.

(1)	Total actual overhead cost	$
(2)	Actual variable overhead cost	$
(3)	Variable overhead costs applied	$
(4)	Fixed overhead costs applied	$
(5)	Overhead volume variance	$

(b)

Determine how many loans were processed.

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