Two-variance method of overhead variance anaiysis The Borsch Company uses machine hours as the basis for applying

Question:

Two-variance method of overhead variance anaiysis The Borsch Company uses machine hours as the basis for applying manufacturing overhead to production. The variable part of the manufacturing overhead rate is $3 per machine hour. Budgeted fixed overhead cost for 1992 is $80,000, and the company's normal capacity is 20,000 machine hours per year. During 1992, actual overhead cost was $140,400, and actual machine hours were 19,800. Standard machine hours for the amount of output produced were 20,400.