Answered step by step
Verified Expert Solution
Question
1 Approved Answer
For May, Mariana company planned production of 13,600 units (80% of its production capacity of 17,000 units) and prepared the following overhead budget. The
For May, Mariana company planned production of 13,600 units (80% of its production capacity of 17,000 units) and prepared the following overhead budget. The company applies overhead with a standard of 3 DLH per unit and a standard overhead rate of $3.79 per DLH. 80% Operating Level 13,600 Overhead Budget Production (in units) Budgeted overhead Variable overhead costs. Indirect materials Indirect labor Power Maintenance Total variable overhead costs Fixed overhead costs Rent of building Depreciation-Machinery Supervisory salaries Total fixed overhead costs Total overhead $ 24,480 40,800 10,200 3,672 79,152 25,500 17,000 32,980 75,480 $ 154,632 It actually operated at 90% capacity (15,300 units) in May and incurred the following actual overhead. Indirect labor Power Maintenance Actual Overhead Costs Indirect materials $ 24,480 44,000 11,475 8,200 25,500 17,000 36,000 $ 166,655 Rent of building Depreciation-Machinery Supervisory salaries Actual total overhead 1. Compute the overhead controllable variance and identify it as favorable or unfavorable. 2. Compute the overhead volume variance and identify it as favorable or unfavorable. 3. Prepare an overhead variance report at the actual activity level of 15,300 units.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started