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Problem 1 5 - 2 6 ( Algo ) Variable and fixed overhead variances - various issues LO 1 5 - 5 , 1 5
Problem Algo Variable and fixed overhead variancesvarious issues LO
Presented here are the original overhead budget and the actual costs incurred during April for Piccolo Incorporated. Piccolo's
managers relate overhead to direct labor hours for planning, control, and product costing purposes. The original budget is based on
budgeted production of units in standard direct labor hours. Actual production of units required actual
direct labor hours.
Variable overhead
Fixed overhead
Required:
a Calculate the flexed budget allowances for variable and fixed overhead for April.
b Calculate the direct labor efficiency variance for April expressed in terms of direct labor hours.
c Calculate the predetermined overhead application rate for both variable and fixed overhead for April.
d Calculate the fixed and variable overhead applied to production during April if overhead is applied on the basis of standard hours
allowed for actual production achieved.
e Calculate the fixed overhead budget and volume variances for April.
f Calculate the overapplied or underapplied fixed overhead for April.
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