For 2013, Riguilio Inc. set predetermined variable and fixed overhead rates, respectively, at $ 6.50 and $

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For 2013, Riguilio Inc. set predetermined variable and fixed overhead rates, respectively, at $ 6.50 and $ 9.35 based on an expected monthly capacity of 4,000 machine hours. Each unit of product requires 1.25 machine hours. During August 2013, the company produced 3,360 units and incurred $ 27,000 of variable overhead costs and $ 41,400 of fixed overhead costs. The firm used 4,100 machine hours during August 2013.

a. Using separate overhead rates, calculate overhead variances using the four-variance approach.

b. Using a combined overhead rate, calculate variances using the three-variance approach.

c. Using a combined overhead rate, calculate variances using the two-variance approach.

d. Using a combined overhead rate, calculate variances using the one-variance approach.


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Cost Accounting Foundations And Evolutions

ISBN: 9781618533531

10th Edition

Authors: Amie Dragoo, Michael Kinney, Cecily Raiborn

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