43.

Please explain for #46, how to get variable overhead efficiency variance. Also, please explain for #48, how to get fixed manufacturing overhead volume variance. The most simplified explanation with the equations works best. Thank you.

A manufacturing company uses a standard costing system in which standard machine-hours (MHs) is the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below: Denominator level of activity 6,800 MHS

Overhead costs at denominator activity level:

variable overhead cost $31,620

fixed overhead cost $95,540

The following data pertain to operations for the most recent period:

Actual hours 7,000 MHs

Standard hours allowed for actual output 6,984 MHs

Actual total variable manufacturing overhead cost $30,800

Actual total fixed manufacturing overhead cost $97,340 What is the predetermined overhead rate to the nearest cent?

A.	$18.17 per MH

B.	$18.31 per MH

C.	$18.70 per MH

D.	$18.84 per MH

Variable overhead + Fixed overhead = $31,620 + $95,540 Predetermined overhead rate = Estimated total manufacturing overhead Estimated total amount of the allocation base = $127,160 6,800 MHs = $18.70 per MH

44.

How much overhead was applied to products during the period to the nearest dollar?

A.

$128,140

B.

$130,601

C.

$130,900

D.

$127,160

Overhead applied = Predetermined overheard rate Standard hours allowed for the actual output = $18.70 per MH 6,984 MHs = $130,600.80

45.

What was the variable overhead rate variance for the period to the nearest dollar?

A.

$1,750 U

B.

$820 F

C.

$1,750 F

D.

$820 U

SR = $31,620 6,800 MHs = $4.65 per MH Variable overhead rate variance = AH(AR - SR) = $30,800 - (7,000 MHs $4.65 per MH) = $30,800 - $32,550 = $1,750 F

46.

What was the variable overhead efficiency variance for the period to the nearest dollar?

A.

$1,746 U

B.

$70 U

C.

$820 F

D.

$74 U

Variable overhead efficiency variance = (AH SR) - (SH SR) = $32,550 - (6,984 MHs $4.65 per MH) = $32,550 - $32,476 = $74 U

47.

What was the fixed manufacturing overhead budget variance for the period to the nearest dollar?

A.

$1,800 U

B.

$222 F

C.

$1,010 U

D.

$785 U

Budget variance = Actual fixed overhead - Budgeted fixed overhead cost = $97,340 - $95,540 = $1,800 U

48.

What was the fixed manufacturing overhead volume variance for the period to the nearest dollar?

A.

$2,565 F

B.

$2,810 F

C.

$225 U

D.

$2,585 F

Fixed component of predetermined overhead rate = Estimated total fixed manufacturing overhead cost Estimated total amount of the allocation base = $95,540 6,800 MHs = $14.05 per MH Volume variance = Budgeted fixed overhead cost - Fixed overhead applied to work in process = $95,540 - (6,984 MH $14.05 per MH) = $95,540 - $98,125 = $2,585 F