wwwww Budgeted production (units) Budgeted direct labor (standard hours) Budgeted overhead Variable overhead Fixed overhead Total overhead 35,000 350,000 $ 1,400,000 600,000 $ 2,000,000 37,500 375,000 $ 1,500,000 600,000 $ 2,100,000 40,000 400,000 $ 1,600,000 600,000 $ 2,200,000 During the current month, the company operated at 70% of capacity, direct labor of 340,000 hours were used, and the following actual overhead costs were incurred. Actual variable overhead Actual fixed overhead Actual total overhead $ 1,375,000 628,600 $ 2,003,600 1. Compute the total variable overhead variance and identify it as favorable or unfavorable. Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no variance. 2. Compute the total fixed overhead variance and identify it as favorable or unfavorable. Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no variance. ----At 70% of Operating Capacity------- Standard Direct Labor Hours Overhead Rate Standard Direct Labor Hours Standard Overhead Applied Favorable or Unfavorable Actual Overhead Overhead Variance Variable overhead variance Fixed overhead variance $ 4.00 1.60 628,600

wwwww Budgeted production (units) Budgeted direct labor (standard hours) Budgeted overhead Variable overhead Fixed overhead Total overhead 35,000 350,000 $ 1,400,000 600,000 $ 2,000,000 37,500 375,000 $ 1,500,000 600,000 $ 2,100,000 40,000 400,000 $ 1,600,000 600,000 $ 2,200,000 During the current month, the company operated at 70% of capacity, direct labor of 340,000 hours were used, and the following actual overhead costs were incurred. Actual variable overhead Actual fixed overhead Actual total overhead $ 1,375,000 628,600 $ 2,003,600 1. Compute the total variable overhead variance and identify it as favorable or unfavorable. Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no variance. 2. Compute the total fixed overhead variance and identify it as favorable or unfavorable. Note: Indicate the effect of the variance by selecting favorable, unfavorable, or no variance. ----At 70% of Operating Capacity------- Standard Direct Labor Hours Overhead Rate Standard Direct Labor Hours Standard Overhead Applied Favorable or Unfavorable Actual Overhead Overhead Variance Variable overhead variance Fixed overhead variance $ 4.00 1.60 628,600

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter4: Job Order Costing

Section: Chapter Questions

Problem 7EA: A company estimates its manufacturing overhead will be $750,000 for the next year. What is the...

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