Question
Brookster Inc. used a standard costing system for its production process. Fixed overhead is allocated based on machine hours. Budgeted fixed overhead for the month
Brookster Inc. used a standard costing system for its production process. Fixed overhead is allocated based on machine hours. Budgeted fixed overhead for the month was $16,910 for budgeted capacity of 8,900 machine hours. Actual fixed overhead was $17,500 for 1,800 units of output. The standard time allowed was 5 machine hours per unit of output.
Required:
(a) Compute SQ in total:
(b) Compute the Standard Price for fixed overhead:
(c) Compute the Fixed Overhead Spending Variance and Fixed Overhead Production-Volume Variance. Be sure to label your variances as favorable (F) or unfavorable (U).
(d) Is overhead under or over allocated? By how much?
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