Determine fixed and total factory overhead application rates

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Factory Overhead Analysis-Two, Three, and Four Variances Walkenhorst Company's machining department prepared its 2010 budget based on the following data:

Practical capacity 40,000 units Machine hours per unit 2

Variable factory overhead $3.00 per machine hour Fixed factory overhead $360,000

The department uses machine hours to apply factory overhead. In 2010, the department used 85,000 machine hours and $625,000 in total manufacturing overhead to manufacture 42,000 units. Actual fixed overhead for the year was $375,000.

Required: Set up an Excel spreadsheet to determine for the year:

1. The variable, fixed, and total factory overhead application rates.

2. The flexible budget for overhead cost based on output achieved in 2010.

3. The production-volume variance.

4. The total overhead spending variance.

5. The overhead efficiency variance.

6. The variable and fixed overhead spending variances.

Reference no: EM13876703

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