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)   594,000   Actual variable overhead $928,000   Actual direct labor hours (AH)   446,000   Actual fixed overhead $835,600   Required: 1. Compute the applied variable overhead. $fill in the blank 6 2. Compute the applied fixed overhead. $fill in the blank 1 3. Compute the fixed overhead spending and volume variances. Enter amounts as positive numbers and select Favorable or Unfavorable. Spending variance   $fill in the blank 2   Unfavorable  Volume variance   $fill in the blank 4   Unfavorable

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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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)   594,000   Actual variable overhead $928,000  
Actual direct labor hours (AH)   446,000   Actual fixed overhead $835,600  

Required:

1. Compute the applied variable overhead.
$fill in the blank 6

2. Compute the applied fixed overhead.
$fill in the blank 1

3. Compute the fixed overhead spending and volume variances. Enter amounts as positive numbers and select Favorable or Unfavorable.

Spending variance   $fill in the blank 2   Unfavorable 
Volume variance   $fill in the blank 4   Unfavorable 

 

 

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