machine hours. Problem 11-37 Overhead Variances (LO 11-5) Wilmington Composites, Inc., developed its overhead application rate from the annual budget. The bud- pany is able to schedule production uniformly throughout the year. The cost driver for overhead costs is get is based on an expected total output of 720,000 units requiring 3,600,000 machine hours. The com- overhead costs for March amounted to $750,000. The actual costs, as compared to the annual budget and A total of 66,000 units requiring 315,000 machine hours were produced during March. Actual $792,000 to one-twelfth of the annual budget, are as follows: WILMINGTON COMPOSITES, INC. 1(a). Applied overhead costs Annual Budget Per Total Per Machine Amount Monthly Actual Costs Unit Hour Variable overhead: Budget for March Indirect material $2,448,000 $3.40 $ .68 $204,000 $222,000 Indirect labor 1,800,000 2.50 .50 150,000 150,000 Fixed overhead: Supervision 1,296,000 1.80 .36 108,000 102,000 Utilities. 1,080,000 1.50 .30 90,000 108,000 Depreciation. 2,016,000 2.80 .56 168,000 168,000 Total $8,640,000 $12.00 $2.40 $720,000 $750,000 Required: 1. Prepare a schedule showing the following amounts for Wilmington Composites, Inc., for March. a. Applied overhead costs. b. Variable-overhead spending variance. c. Fixed-overhead budget variance. d. Variable-overhead efficiency variance. e. Fixed-overhead volume variance. Where appropriate, be sure to indicate whether each variance is favorable or unfavorable. 2. Draw a graph similar to Exhibit 11-7 to depict the variable-overhead variances. 3. Why does your graph differ from Exhibit 11-7, other than the fact that the numbers differ? (CMA, adapted) Problem Jamani