Compute the variable overhead spending variance and the variable overhead efficiency variance.

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Answer 1

Question

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 23, Problem 5AP

(a)

To determine

Compute the variable overhead spending variance and the variable overhead efficiency variance.

(b)

To determine

Compute the fixed overhead spending variance and the fixed overhead volume variance.

(c)

To determine

Compute the total overhead controllable variance.

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Please provide the answer to this general accounting question using the right approach.

A company estimates $12 million in direct labor, and overhead costs for the next year will be $9,200,000 for indirect labor and $800,000 for factory utilities. The company uses machine hours as its overhead allocation base. If 300,000 machine hours are planned for this next year, what is the company's plantwide overhead rate?

Dawson Metal Works applies manufacturing overhead to products based on standard direct labor hours. The budgeted fixed manufacturing overhead cost for the most recent month was $35,700, and the actual fixed manufacturing overhead cost for the month was $36,200. The company based its original budget on 7,500 direct labor hours. The standard hours allowed for the actual output of the month totaled 7,100 direct labor hours. a. What was the overall fixed manufacturing overhead budget variance for the month? b. What was the fixed overhead rate? c. What was the volume variance?

Answer 2

Question

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 23, Problem 5AP

(a)

To determine

Compute the variable overhead spending variance and the variable overhead efficiency variance.

(b)

To determine

Compute the fixed overhead spending variance and the fixed overhead volume variance.

(c)

To determine

Compute the total overhead controllable variance.

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Check out a sample textbook solution

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Answer 3

Question

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 23, Problem 5AP

(a)

To determine

Compute the variable overhead spending variance and the variable overhead efficiency variance.

(b)

To determine

Compute the fixed overhead spending variance and the fixed overhead volume variance.

(c)

To determine

Compute the total overhead controllable variance.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

Chapter 23, Problem 5AP

(a)

To determine