Problem 11-38 Overhead Varlances (LO 11-5) Newark Plastics Corporation developed its overhead application rate from the annual budget. The budget is based on an expected total output of 672,000 units requiring 3,360,000 machine hours. The company is able to schedule production uniformly throughout the year. Machine hours is the cost driver for overhead costs. A total of 63,000 units requiring 285,600 machine hours were produced during May. Actual overhead costs for May amounted to $909,200. The actual costs, as compared to the annual budget and to one-twelfth of the annual budget, are as follows: NEWARK PLASTICS CORPORATION Variable overhead: Indirect material Indirect labor Fixed overhead: Supervision Utilities Depreciation Total Required: Annual Budget Total Amount Per Unit Per Machine Hour Monthly Budget Actual Costs for May $ 2,620,800 $ 3.90 $0.78 $218,400 $236,400 1,948,800 2.90 0.58 162,400 162,400 1,747,200 2.60 0.52 145,600 139,600 1,680,000 2.50 0.50 140,000 158,000 2,553,600 3.80 0.76 212,800 212,800 $10,550,400 $15.70 $3.14 $879,200 $909,200 1. Prepare a schedule showing the following amounts for Newark Plastics for May. a. Applied overhead costs. c. Fixed-overhead budget variance. b. Variable-overhead spending variance. d. Variable-overhead efficiency variance. e. Fixed-overhead volume variance. Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1A Req 1B and 1D Req 1C and 1E Variable-overhead Spending Variance and Efficiency Variance. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance). Round "Projected Overhead" and "Flexible Budget" to 2 decimal places.) Variable Overhead Actual Overhead Spending Variance Indirect material Indirect labor $ 236,400 162,400 Budgeted Overhead at Actual Hours $ 245,700.00 $ 245,700.00 Flexible Budget (Applied Overhead) Efficiency Variance S 245,700.00 x 182,700.00 x S 428,400.00 Machine hours $ 398,800 Unfavorable $ 0 Favorable S 0 Problem 11-38 Overhead Varlances (LO 11-5) Newark Plastics Corporation developed its overhead application rate from the annual budget. The budget is based on an expected total output of 672,000 units requiring 3,360,000 machine hours. The company is able to schedule production uniformly throughout the year. Machine hours is the cost driver for overhead costs. A total of 63,000 units requiring 285,600 machine hours were produced during May. Actual overhead costs for May amounted to $909,200. The actual costs, as compared to the annual budget and to one-twelfth of the annual budget, are as follows: NEWARK PLASTICS CORPORATION Total Amount Variable overhead: Indirect material Indirect labor Fixed overhead: Supervision Utilities Depreciation Total Required: Annual Budget Per Unit Per Machine Hour Monthly Budget Actual Costs for May $ 2,620,800 $ 3.90 $0.78 $218,400 $236,400 1,948,800 2.90 0.58 162,400 162,400 1,747,200 2.60 0.52 145,600 139,600 1,680,000 2.50 0.50 140,000 158,000 2,553,600 3.80 0.76 212,800 212,800 $10,550,400 $15.70 $3.14 $879,200 $909,200 1. Prepare a schedule showing the following amounts for Newark Plastics for May. a. Applied overhead costs. b. Variable-overhead spending variance. c. Fixed-overhead budget variance. d. Variable-overhead efficiency variance. e. Fixed-overhead volume variance. Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1A Req 1B and 1D Req 1C and 1E Fixed-overhead Budget Variance and 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). Round "Applied Overhead" to 2 decimal places.) Fixed Overhead Actual Overhead Budget Variance Supervision Utilities Depreciation 139,600 158,000 212,800 Flexible Budget Volume Variance Applied Overhead $ 145,600 S 148,512.00 x 140,000 142,800.00 212,800 217,056.00 x S 508,368.00 Machine hours $ 510,400 $ 12,000 Unfavorable $ 498,400 $ 62,300 Favorable 0