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Silverstone's production budget for March called for making 39,700 units of single product. The firm's production standards allow one-quarter of a machine hour per unit produced. The fixed overhead budget for March was $35,333. Silverstone uses an absorption costing system.
Units produced 36,673
Fixed overhead costs incurred $37,400
a. Compute the predetermined fixed overhead application rate that would be used in March.
b. Compute the number of machine hours that would be allowed for actual March production.
c. Compute the fixed overhead applied to work in process during March.
d. Compute the over- or under-applied fixed overhead for March.
e. Compute the fixed overhead budget and volume variances for March.
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