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The Scollish firm of Cullen and MacNell produces a single product and uses a standard costing system to help controt costs. Manufactuaing ovethead is applied
The Scollish firm of Cullen and MacNell produces a single product and uses a standard costing system to help controt costs. Manufactuaing ovethead is applied to production on the basis of standard machine hours. The Scottish currency is the British pound. According to the company's flexible budget, the following overhead costs should be incurred at an activity level of 18000 machine: hours (the denominalor actlvity level chosen for the year): Duting the year, the following operating results were recorded: At the end of the year, the company's manufacturing overhead account contained the following data: Manogement would like to determine the cause of the 84,000 underapplied overhead. Required: Requireo: 1. Compute the predeterminexi overhead rate for the year. Break it down into variable and fixed cost elements. (Round your answors. to 2 decimal ploces.) 2. This part of the question is not part of your Connect assignment. 3. Analyze the A4.000 underapplied overhead figure in terms of the variable overhead spencing and efficiency variances and the fixed overhiedd budget and volume variances. (Indicate the effect of ench variance by selecting "F" for favorable, "U" far unfovorabie. ond "None" for no effect (i.e., zero varionce).)
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