The standard cost card for the single product manufactured by Cutter, Inc., is given below:

Inputs	(1) Standard Quantity or Hours	(2) Standard Price or Rate			Standard Cost (1) (2)
Direct materials	5.3 yards	$	4.00	per yard	$	21.20
Direct labor	0.7 hours	$	18.00	per hour		12.60
Variable overhead	0.7 hours	$	2.00	per hour		1.40
Fixed overhead	0.7 hours	$	4.50	per hour		3.15
Total standard cost per unit					$	38.35

Manufacturing overhead is applied to production on the basis of standard direct labor-hours. During the year, the company worked 10,700 hours and manufactured 15,000 units of product. Selected data relating to the companys fixed manufacturing overhead cost for the year are shown below:

Actual Fixed Overhead			Budgeted Fixed Overhead			Fixed Overhead Applied to Work in Process
$43,000			?			? hours $? per hour = $?
	Budget variance, $?			Volume variance, $5,400 F

Required:

1. What were the standard hours allowed for the years production?

2. What was the amount of budgeted fixed overhead cost for the year?

3. What was the fixed overhead budget variance for the year? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

4. What denominator activity level did the company use in setting the predetermined overhead rate for the year?

Exercise 10A-5 Using Fixed Overhead Variances [LO10-4] The standard cost card for the single product manufactured by Cutter, Inc., is given below: Standard Quantity or Hours 5.3 yards $4.00 per yard 0.7 hours 18.00 per hour 0.7 hours 2.00 per hour 0.7 hours 4.50 per hour Standard Price or Rate Standard Inputs Direct materials Direct labor Variable overhead Fixed overhead $21.20 12.60 1.40 3.15 $38.35 2.00 Pe) Ost Total standard cost per unit Manufacturing overhead is applied to production on the basis of standard direct labor-hours. During the year, the company worked 10,700 hours and manufactured 15,000 units of product. Selected data relating to the company's fixed manufacturing overhead cost for the year are shown below: Actual Fixed Overhead Fixed Overhead Applied to Work in Process Budgeted Fixed Overhead hours x $? per hour $43,000 Budget variance, Volume variance, $5,400 F Required: 1. What were the standard hours allowed for the year's production? 2. What was the amount of budgeted fixed overhead cost for the year? 3. What was the fixed overhead budget variance for the year? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) 4. What denominator activity level did the company use in setting the predetermined overhead rate for the year? DLHs 1. Standard hours allowed for the years production 2. Budgeted fixed overhead cost 3. Budget variance 4. Denominator activity DLHs