QUESTION:

Katherine Ltd. has the following budgeted and actual information at year end:

	Budgeted	Actual
Production (units)	64,000	65,600
Total variable overhead	$185,600	$185,200
Total fixed overhead	$288,000	$279,000
Direct labour hours (total)	-	85,280 hrs
Direct labour hours per unit	0.50 hrs

Predetermined plantwide overhead rates are calculated using direct labour hours based on budgeted production.

The company uses actual direct labour hours to assign overhead.

Use the above information to answer the following questions.

What is the fixed overhead application rate per direct labour hour?

What is the applied fixed overhead for the year?

Compute the fixed overhead spending variance.

Indicate if the fixed overhead spending variance is Favourable (enter F) or Unfavourable (enter UF).

Compute the amount of the fixed overhead volume variance.

Indicate if the fixed overhead volume variance is Favourable (enter F) or Unfavourable (enter UF).

Compute the variable overhead application rate per direct labour hour.

What is the applied variable overhead for the year?

Compute the variable overhead spending variance.

Indicate if the variable overhead spending variance is Favourable (enter F) or Unfavourable (enter UF).

Compute the variable overhead efficiency variance.

Indicate if the variable overhead efficiency variance is Favourable (enter F) or Unfavourable (enter UF).