Question
Bushman Company is planning to produce 3,200,000 carburetors for the coming year. Each carburetor requires 0.375 standard hours of labor for completion. The company uses
Bushman Company is planning to produce 3,200,000 carburetors for the coming year. Each carburetor requires 0.375 standard hours of labor for completion. The company uses direct labor hours to assign overhead to products. The total fixed overhead budgeted for the coming year is $1,980,000. Total budgeted overhead is $4,050,000. Predetermined overhead rates are calculated using expected production, measured in direct labor hours. Actual results for the year follow: Actual production (units) 3,540,000 Actual direct labor hours 1,190,000 Actual fixed overhead $1,920,000 Actual variable overhead $2,150,000
Required:
A. Compute the applied fixed overhead.
B. Compute the fixed overhead spending and volume variances.
C. Compute the applied variable overhead.
D. Compute the variable overhead spending and efficiency variances. Carry per hour computations out to 3 decimals.
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