Kathryn Kjaersgaard is the supervisor of Department 5 in the Arhus plant of Copenhagen Instrument Company. She is responsible for the cost of direct materials, direct labor, and variable overhead costs incurred in this department. The fixed overhead cost is not under her jurisdiction.

During a recent week, actual factory overhead costs (in Danish krone) for Department 5 were as follows:

The department operated at 45,000 direct labor hours during the week. A budget of factory overhead for 45,000 direct labor hours is as follows:

Variable overhead is costed to the products at the rate of DKr0.9 per direct labor hour, and fixed overhead is costed to the products at the rate of DKr2.8 per direct labor hour.

Required: 

1. How much overhead was costed to the products during the week?

2. Compute the underapplied or overapplied factory overhead for the week.

3. Prepare a report for Kjaersgaard showing all actual variable overhead costs, all budgeted variable overhead costs, and variances for each cost listed.

4. Identify any items of overhead that are over the budgeted amount by more than 10 percent.

Transcribed Image Text:

Actual Variable Overhead: Indirect materials DKr19,400 14,200 Supplies Telephone. Heat and light Power... Repairs and maintenance Total variable overhead. Actual Fixed Overhead: Indirect labor Supervision. Heat and light Repairs and maintenance Depreciation... Total fixed overhead Total actual overhead 700 1,600 7,000 3,200 DKr 46,100 DKr61,000 42,000 7,000 9,000 21,000 140,000 DKr186,100