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Just help me finish the T-account part, and also make sure my other answer are correct. Final Exam Problem 3: Flexible Budgets and overhead Analysis
Just help me finish the T-account part, and also make sure my other answer are correct.
Final Exam Problem 3: Flexible Budgets and overhead Analysis Flick Company uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of standard direct labor-hours. The company's total budgeted variable and fixed manufacturing overhead costs at the denominator level of activity are $20,000 for variable overhead and $30,000 for fixed overhead. The predetermined overhead rate, including both fixed and variable components, is $2.50 per direct labor-hours. The standards call for two direct labor-hours per unit of output produced. Last year, the company produced 11,500 units of product and worked 22,000 direct labor-hours. Actual costs were $22,500 for variable overhead and $31,000 for fixed overhead. Required: a. What is the denominator level of Activity? 20,000 DLHs Answer here Details of computation below for possible partial credit: Total overhead at the denominator level of activity (a)....................... $50,000 Predetermined overhead rate (b)............... $2.50/DLH Denominator level of activity (a) / (b)......... 20,000 DLHs b. What were the standard hours allowed for the output last year? 23,000 DLHs Answer here Details of computation below for possible partial credit: Actual output ........... 11,500 units Standard DLH per unit ..... * 2 DLH per unit Standard DLHs allowed ...... 11,500*2 = 23,000 DLHs c. What was the variable overhead spending variance? 500 Unfavorable Details of computation below for possible partial credit: Variable overhead spending variance: *$20,000 20,000 DLHs = $1.00 Spending variance = (Actual Hour* Actual Rate) - (Actual Hour* Standard Rate) = ($22,500) - (22,000 DLHs* $1.00*)= $500 (unfavorable) d. What was the variable overhead efficiency variance? 1,000 Favorable Details of computation below for possible partial credit: Variable overhead efficiency variance: 2 DLHs per unit x 11,500 units = 23,000 DLHs Spending variance = (AH* SR) - (SH* SR) = (22,000 DLHs x $1.00) - (23,000 DLHs* x $1.00) = 1000 (favorable) e. What was the fixed overhead budget variance? 1,000 Unfavorable Details of computation below for possible partial credit: Fixed overhead budget variance: Budget variance = Actual fixed overhead - Flexible budget fixed overhead = 31,000-1,000= 1,000 (unfavorable) f. What was the fixed overhead volume variance? 4,500 Favorable Details of computation below for possible partial credit: Fixed overhead volume variance: *$ 30,00020000 DLH= $1.50 Volume variance = Fixed portion of predetermined overhead rate x (Denominator hours - Standard hours allowe = $1.50* (20,000 DLH - 23,000 DLH) = $4,500 (favorable) g. Complete the following Manufacturing Overhead T-account for the period: Manufacturing Overhead Actual Overhead Balance Include the balance in the account either debit or credit and label each entry. Overhead Applied 2 DLHs per unit x 11,500 units = 23,000 DLHs ible budget fixed overhead = 31,000-1,000= 1,000 (unfavorable) ned overhead rate x (Denominator hours - Standard hours allowed) Overhead AppliedStep by Step Solution
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