Overhead information for Cran-Mar Company for October follows: $16,500 $4,900 Total factory overhead cost incurred Budgeted fixed factory overhead cost Total standard overhead rate per machine hour (MH) 4.99 Standard variable factory overhead rate per MH 3.90 Standard MHs allowed for the units manufactured 4, 700 Required: 1. What is the standard fixed factory overhead rate per machine hour (MH)? 2. What is the denominator activity level that was used to establish the fixed factory overhead application rate? 3. Two-way analysis (breakdown) of the total factory overhead cost variance: Using panel B in Exhibit 15.7 as a guide, calculate the following factory overhead cost variances for October and indicate whether each variance is favorable (F) or unfavorable (U). a. Total flexible-budget variance. b. Production volume variance. c. Total overhead cost variance. 4. Confirm your answer to 3b above by using the model at the bottom of Exhibit 15.6 to calculate the production volume variance and indicate whether the variance is favorable (F) or unfavorable (U). Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 What is the standard fixed factory overhead rate per machine hour (MH)? (Round your answer to 2 decimal places.) Standard fixed factory overhead rate per MH EXHIBIT 15.7 Schmidt Machincry Company, Factory Ovcrhcad Variance Analyscs, Oetober 2019 Panel 1: Four-Variance Analysis Standard Cost Flexible Budget Based on Outputs (SO X SP) Flexible Budget Based on Inputs (AO X SP) Applied to Production Actual SO X SP) . (3,510 x $11.5755) $40,630 (3,510 x $12.00) $42,120 (3,900 x $12.00) $46,800 (3,900 x $12.00) $46,800 Variable Overhead Spending Efficiency variance $4,680F Total variable overhead cost variance NA variance $1,490F $6,170F Fixed (3,900 x $24.00) $93,600 Overhead $120,000 $130,650 $120,000 Production volume Spending variance $10,650U N/A variance $26,400U Total fixed overhead cost variance $37,050U Total overhead cost variance = $30,80U (e., under applied overhead= $30,880U) Total Panel 2: Three-Variance Analysis Standard Cost Flexible Budget Flexible Budget Applied to Production Based on Inputs Based on Outputs Actual Variable $ 40,630 $42,120 $ 46,800 Overhead Fixed 3,900 hours x$36.00hr $140,400 $130,650 $171,280 $120.000 $162,120 $120,000 $166,800 Overhead Production volume variance $26,400U Total Spending variance = $9,160U Efficiency variance $4,680F Total overhead cost variance = $30,880U (ie., under applied overhead = $30,880U) Panel 3: Two-Variance Analysis Standard Cost Flexible Budget Based on Inputs Flexible Budget Applied to Production Based on Outputs Actual Variable Overhead $ 46,800 $ 40,630 3,900 hours x$36.00hr $140,400 Fixed $130,650 $171,280 $120,000 $166,800 Overhead Production volume variance $26,400U Total Flexible-budget variance $4,480U Total overhead cost variance = $30,880U (i.e., under applied overhead = $30,88OU) EXHIBIT 15.6 General Model: Four-Variance Analysis of Total Factory Overhead Cost Variance (B) (C) (A) (D) Flexible Budget Flexible Budget Standard Based on Based on Overhead Cost Inputs Outputs Applied Cost Incurred Variable Overhead Total standard quantity of the activity for applying variable overhead to the output of the period Actual quantity of the activity for applying variable overhead x Standard variable overhead rate x Standard variable Amount spent overhead rate Variable overhead Variable overhead spending variance efficiency variance Fixed Overhead Total standard quantity of the activity for applying overhead to the output of the period Standard fixed overhead rate Budgeted (lump-sum Amount spent amount Fixed overhead spending (budget) variance Production (denominator) volume variance