Solution-Determine the amount of over or under-applied

Determine the amount of over or under-applied overhead

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Reference no: EM132583290

Factory overhead cost and production data for a firm for a year were as follows:

Actual

Variable cost- $90,000

Fixed cost- $205,000

Machine Hours- 20,000

Budget

Variable cost-$95,000

Fixed cost- $190,000

Machine Hours- 19,000

Factory overhead is recovered from production using machine hours as the cost driver.

Question a. Calculate the factory overhead recovery rate.

Question b. Determine the amount of over or under-applied overhead. Your answer must clearly state whether the calculated amount is over or under-applied.

Question c. Analyse over/under applied overhead into a spending variance and a capacity variance.

Reference no: EM132583290

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Determine the amount of over or under-applied overhead

Reference no: EM132583290

Reference no: EM132583290

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