Maxwell Company uses a standard cost accounting system and applies production overhead to products on the basis of machine hours. The following information is available for the year just ended:

Standard variable-overhead rate per hour: $7.50

Standard fixed-overhead rate per hour: $12.60

Planned activity during the period: 21,000 machine hours

Actual production: 13,200 finished units

Machine-hour standard: Two completed units per machine hour

Actual variable overhead: $156,200

Actual total overhead: $437,800

Actual machine hours worked: 22,000

Required:

1. 1. Calculate the budgeted fixed overhead for the year.

2. 2. Compute the variable-overhead spending variance.

3. 3. Calculate the company’s fixed-overhead volume variance.

4. 4-a. Did Maxwell spend more or less than anticipated for fixed overhead? How much?

5. 4-b. What was the difference in actual and anticipated overhead?

6. 5. Was variable overhead underapplied or overapplied during the year? By how much?

Was variable overhead underapplied or overapplied during the year? By how much? (Do not round intermediate calculations.)

Variable overhead is

underapplied

by

Compute the variable-overhead spending variance. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance). Do not round intermediate calculation.)

Variable-overhead spending variance

Favorable

Calculate the company’s fixed-overhead volume variance. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance). Do not round intermediate calculation.)

Fixed-overhead volume variance

Unfavorable

What was the difference in actual and anticipated overhead?

Fixed-overhead budget variance

Was variable overhead underapplied or overapplied during the year? By how much? (Do not round intermediate calculations.)

Variable overhead is

underapplied

by