Question
Compute the variable overhead rate variance, variable overhead efficiency variance, fixed overhead budget variance, and fixed overhead volume variances for the following: Norwall Company's variable
Compute the variable overhead rate variance, variable overhead efficiency variance, fixed overhead budget variance, and fixed overhead volume variances for the following:
Norwall Company's variable manufacturing overhead should be $1.20 per standard machine-hour
and its fixed manufacturing overhead should be $81,744 per month.
The following information is available for a recent month:
a.The denominator activity of 31,440 machine-hours is used to compute the predetermined overhead rate.
b.At the 31,440 standard machine-hours level of activity, the company should produce 13,100 units of product.
c.The company's actual operating results were:
Number of units produced14,120
Actual machine-hours32,540
Actual variable manufacturing overhead cost $42,302
Actual fixed manufacturing overhead cost $82,900
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