Chapter 10.A, Problem 2E

EXERCISE 10A-2 Predetermined Overhead Rate; Overhead Variances LO10-3, LO10-4
Xonval Company's budgeted variable manufacturing overhead cost is S3.00 per machine-hour and its budgeted fixed manufacturing overhead is S300_;000 per month.

1. At a denominator activity' of 60_:000 machine-hours, the company should produce 40,000 units of product.
2. The company's actual operating results were:

Required:

1. Compute the predetermined overhead rate and break it down into variable and fixed cost elements.
2. Compute the standard hours allowed for the actual production.
3. Compute the variable overhead rate and efficiency variances and the fixed overhead budget and volume variances.