Walkenhorst Company’s machining department prepared its 2010 budget based on the following data:

Practical capacity .............40,000 units

Machine hours per unit .......... 2

Variable factory overhead ......... $3.00 per machine hour

Fixed factory overhead .......... $360,000

The department uses machine hours to apply factory overhead. In 2010, the department used 85,000 machine hours and $625,000 in total manufacturing overhead to manufacture 42,000 units. Actual fixed overhead for the year was $375,000.

Actual number of machine hours spent							85,000
Actual factory overhead							$ 625,000
Actual production in units							42,000
Actual total fixed factory overhead							$ 375,000

Required

Set up an Excel spreadsheet to determine for the year:

1. The variable, fixed, and total factory overhead application rates.

2. The flexible budget for overhead cost based on output achieved in 2010.

3. The production-volume variance.

4. The total overhead spending variance.

5. The overhead efficiency variance.

6. The variable and fixed overhead spending variances.