EXERCISE BA-4 Fixed Overhead Variances (LO8-7) Selected operating information on three different companies for a recent year is given below: Company Full-capacity machine hours. 10,000 18,000 20,000 Budgeted machine-hours 9,000 17,000 20,000 Actual machine-hours... 9,000 17,800 19,000 Standard machine-hours allowed for actual production 9,500 16,000 20,000 "Denominator activity for computing the predetermined overhead rate. Required For each company, state whether the company would have a favorable or unfavorable volume variance and why. EXERCISE BA-5 Using Fixed Overhead Variances [LO8-7] The standard cost card for the single product manufactured by Cutter, Inc., is given below: Standard Cost Card-Per Unit Direct materials, 3 yards at $6.00 per yard. $ 18 Direct labor, 4 hours at $15.50 per hour. 62 Variable overhead, 4 hours at $1.50 per hour 6 Fixed overhead, 4 hours at $5.00 per hour. 20 Total standard cost per unit. $106 Manufacturing overhead is applied to production on the basis of standard direct labor-hours. During the year, the company worked 37,000 hours and manufactured 9,500 units of product. Selected data relating to the company's fixed manufacturing overhead cost for the year are shown below: Fixed Overhead Actual Fixed Budgeted Overhead Fixed Overhead I Work in Process $198,700 ? hours x $_?_ per hour ? Budget variance, $_2 Volume variance, $10,000 U Required 1 What were the standard hours allowed for the year's production? 2 What was the amount of budgeted fixed overhead cost for the year? 3. What was the fixed overhead budget variance for the year What denominador activity level did the company use in setting the predetermined overhead rate for the year? 4