Variable and fixed overhead variancesvarious issues. Presented here are the original overhead budget and the actual costs

Variable and fixed overhead variances—various issues. Presented here are the original overhead budget and the actual costs incurred during April for Piccolo, Inc. Piccolo’s managers relate overhead to direct labor hours for planning, control, and product costing purposes. The original budget is based on budgeted production of 15,000 units in 5,000 standard direct labor hours. Actual production of 16,200 units required 5,600 actual direct labor hours.

Required:
a. Calculate the flexed budget allowances for variable and fixed overhead for April.
b. Calculate the direct labor efficiency variance for April expressed in terms of direct labor hours.
c. Calculate the predetermined overhead application rate for both variable and fixed overhead for April.
d. Calculate the fixed and variable overhead applied to production during April if overhead is applied on the basis of standard hours allowed for actual production achieved.
e. Calculate the fixed overhead budget and volume variances for April.
f. Calculate the over- or underapplied fixed overhead forApril.

Transcribed Image Text:

Original Budget $21,000 32,000 Actual Costs Variable overhead Fixed overhead.. $23,600 33,200