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Nelson Co. manufactures a product that requires 3.5 machine hours per unit. The variable and fixed overhead rates were computed using expected capacity of 115,200
Nelson Co. manufactures a product that requires 3.5 machine hours per unit. The variable and fixed overhead rates were computed using expected capacity of 115,200 units (produced evenly throughout the year) and expected variable and fixed overhead costs, respectively, of $1,612,800 and $2,822,400. In October, Nelson manufactured 9,520 units using 33,440 machine hours. October variable overhead costs were $132,000; fixed overhead costs were $235,600. a. What are the standard variable and fixed overhead rates? Standard VOH rate 4 per MH Standard FOH rate 7 per MH b. Compute the variable overhead variances. Note: Do not use a negative sign with your answer. VOH spending variance $ 1,760 Favorable VOH efficiency variance $ 480 Unfavorable Total VOH variance $ 1,280 Favorable C. Compute the fixed overhead variances. Note: Do not use a negative sign with your answer. FOH spending variance 400 Unfavorable $ FOH volume variance 0x Unfavorable Total FOH variance 0x Unfavorable $
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