Variable overhead rate variancea and overhead efficiency

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Reference no: EM13148622

ucher Company uses a standard cost system in which manufacturing overhead costs are applied to units of product on the basis of standard machine-hours. The company's standards are based on variable manufacturing overhead of $3 per machine-hour and fixed manufacturing overhead of $300,000 per year. The denominator level of activity is 30,000 machine-hours. Standards call for 2.5 machine-hours per unit of output. Ac for the year are given below:

  • Units produced 12,800 Units
  • Machine-hours used 31,600 Machine hours
  • Overhead costs incurred:
  • Variable costs $96,000
  • Fixed costs $297,000


Requirements

  • What are the standard hours allowed for the output?
  • What was the variable overhead rate variance?
  • What was the variable overhead efficiency variance?
  • What was the fixed manufacturing overhead budget variance?
  • What was the fixed manufacturing overhead volume variance?

Reference no: EM13148622

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