Required

Calculate the fixed overhead application rate per machine hour $($rounded to $2$ decimal places$)$ using $($a$)$ budgeted output, $($b$)$

normal capacity, and $($c$)$ practical capacity.

What is the total overhead application rate per machine hour $($rounded to $2$ decimal places$)$ for each of the three choices identified in

requirement $1?$

What is the total overhead variance for the year when the overhead application rate per machine hour is determined under each of the

following options: $($a$)$ budgeted output, $($b$)$ normal capacity, and $($c$)$ practical capacity? $[$Round answers to nearest whole number, and

indicate whether each variance is favorable $($F$)$ or unfavorable $($U$).]$

What is causing the results you observe in requirement $3?$

What is the Overhead Efficiency Variance $(-$ Variable Overhead Efficiency Variance$)$ for the year when the overhead application rate

per machine hour is determined under each of the following options: $($a$)$ budgeted output, $($b$)$ normal capacity, and $($c$)$ practical

capacity? $[$Round answers to nearest whole number, and indicate whether each variance is favorable $($F$)$ or unfavorable $($U$).]$

Provide an interpretation of the results reported in requirement $5.$

What is the total Overhead Spending Variance for the year under each of the following assumptions regarding the denominator activity

level used to set the overhead application rate for the year: $($a$)$ budgeted output, $($b$)$ normal capacity, and $($c$)$ practical capacity? Round

answers to nearest whole dollar, and state whether each variance is favorable $($F$)$ or unfavorable $($U$).$

Break down the Total Overhead Spending Variance $($as determined in requirement $7)$ into $($a$)$ a Fixed Overhead Spending Variance

and $($b$)$ a Variable Overhead Spending Variance. Round answers to nearest whole dollar, and state whether each variance is favorable

$($F$)$ or unfavorable $($U$).$

Provide an interpretation of the results reported in requirements $7$ and $8.$

Calculate the Production Volume Variance when the overhead application rate per machine hour is determined under each of the

following options: $($a$)$ budgeted output, $($b$)$ normal capacity, and $($c$)$ practical capacity. Round answers to nearest whole dollar, and

state whether each variance is favorable $($F$)$ or unfavorable $($U$).$

Provide an interpretation of the results reported in requirement $10.$

Summary analysis: Prepare a four$-$variance analysis of the total overhend variance for the period under each of the following options

for determining the fixed overhead application rate: $($a$)$ budgeted output, $($b$)$ normal capacity, and $($c$)$ practical capacity.

Provide summary journal entries at the end of the year to $($a$)$ record all four overhead cost variances $($calculated above, in requirement

and $($b$)$ close the variances to Cost of Goods Sold $($COGS$).$ Assume that variances were determined using "practical capacity" as

the denominator volume level for establishing the fixed overhead application rate and the total overhead application rate. Also assume

that the company uses a single account, Factory Overhead, to record overhead costs.