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Blaze Corporation allocates overhead on the basis of DLH and the standard amount per allocation base is 2.00 DLH per unit. For March, the
Blaze Corporation allocates overhead on the basis of DLH and the standard amount per allocation base is 2.00 DLH per unit. For March, the company planned production of 10,000 units (80% of its production capacity of 12,500 units) and prepared the following budget. The company actually operated at 90% capacity (11,250 units) in March and incurred actual total overhead costs of $127,395. Overhead Budget Production in units Budgeted variable overhead Budgeted fixed overhead 80% Operating Levels 10,000 $ 56,000 $ 66,000 1. Compute the standard overhead rate. Hint. Standard allocation base at 80% capacity is 20,000 DLH, computed as 10,000 units * 2.00 DLH per unit. 2. Compute the total overhead variance. 3. Compute the overhead controllable variance. 4. Compute the overhead volume variance.
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