Question
Cashman Corporation estimated overhead for the year as follows: fixed = $600,000; variable = $5 per unit. Cashman expected to produce 60,000 units for the
Cashman Corporation estimated overhead for the year as follows: fixed = $600,000; variable = $5 per unit. Cashman expected to produce 60,000 units for the year.
a. Compute the rate that will be used to apply overhead costs to products.
b. During the year, Cashman incurred actual overhead costs of $920,000 and produced 62,000 units. Compute the overhead applied to units produced.
c-1. Compute the amount of under- or overapplied overhead.
c-2. Compute the amount of the spending and volume variances.
d. What caused applied overhead to be different from budgeted overhead?
Can you please walk through this problem based on the exact numbers given?
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