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Baird Company makes classic Polish sausage. The company uses a standard cost system to help control costs. Manufacturing overhead is applied to production on the
Baird Company makes classic Polish sausage. The company uses a standard cost system to help control costs. Manufacturing overhead is applied to production on the basis of standard direct labor-hours. According to the company's planning budget, the following manufacturing overhead costs should be incurred at an activity level of 29,000 labor-hours (the denominator activity level): Variable manufacturing overhead cost Fixed manufacturing overhead cost Total manufacturing overhead cost $ 159,500 212500 $ 372.000 During the most recent year, the following operating results were recorded 26,000 27,000 Activity: Actual labor-hours worked Standard labor-hours allowed for the actual output Cost: Actual variable manufacturing overhead cost incurred Actual fixed manufacturing overhead cost incurred $ 184,600 $ 195,750 At the end of the year, the company's Manufacturing Overhead account contained the following data: Actual Manufacturing Overhead 380,350 Applied 29, 350 351,000 Management would like to determine the cause of the $29,350 underapplied overhead. Required: 1. Compute the predetermined overhead rate. Break the rate down into variable and fixed cost elements. 2. Show how the $351,000 Applied figure in the Manufacturing Overhead account was computed. 3. Breakdown the $29,350 underapplied overhead into four components: (1) variable overhead rate variance. (2) variable overhead efficiency variance, (3) fixed overhead budget variance, and (4) fixed overhead volume variance Standard labor-hours allowed for the actual output Cost: Actual variable manufacturing overhead cost incurred Actual fixed manufacturing overhead cost incurred 27,000 $ 184,600 $ 195,750 At the end of the year, the company's Manufacturing Overhead account contained the following data: Actual Manufacturing Overhead 380,350 Applied 29, 350 351.000 Management would like to determine the cause of the $29,350 underapplied overhead. Required: 1. Compute the predetermined overhead rate. Break the rate down into variable and fixed cost elements 2. Show how the $351,000 Applied figure in the Manufacturing Overhead account was computed. 3. Breakdown the $29,350 underapplied overhead into four components: (1) variable overhead rate variance. (2) variable overhead efficiency variance (3) fixed overhead budget variance, and (4) fixed overhead volume variance. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the predetermined overhead rate. Break the rate down into variable and fixed cost elements. (Round your answers to 2 decimal places.) Predetermined overhead rate Variable element Fixed element per hour per hour per hour
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