160) Wangerin Corporation applies overhead to products based on machine-hours. The
denominator level of activity is 6,900 machine-hours. The budgeted fixed manufacturing overhead
costs are $240,810. In April, the actual fixed manufacturing overhead costs were $245,640 and the
standard machine-hours allowed for the actual output were 7,200 machine-hours.
Required:
a. Compute the budget variance for April.
b. Compute the volume variance for April.
164
161) Pickell Incorporated makes a single product—a cooling coil used in commercial refrigerators.
The company has a standard cost system in which it applies overhead to this product based on the
standard machine-hours allowed for the actual output of the period. Data concerning the most
recent year appear below:
Budgeted (Planned) Overhead:
Budgeted variable manufacturing overhead
$96,720
Budgeted fixed manufacturing overhead
231,270
Total budgeted manufacturing overhead
$327,990
Budgeted production (a)
30,000
units
Standard hours per unit (b)
1.30
machine-hours
Budgeted hours (a) × (b)
39,000
machine-hours
Applying Overhead:
Actual production (a)
25,000
units
Standard hours per unit (b)
1.30
machine-hours
Standard hours allowed for the actual production (a) ×
(b)
32,500
machine-hours
Actual Overhead and Hours:
Actual variable manufacturing overhead
$53,600
Actual fixed manufacturing overhead
242,270
Total actual manufacturing overhead
$295,870
Actual hours
33,500
machine-hours
Actual variable overhead rate
$1.60
per machine-hour
Required:
a. Determine the variable overhead rate variance for the year.
b. Determine the variable overhead efficiency variance for the year.
c. Determine the fixed overhead budget variance for the year.
d. Determine the fixed overhead volume variance for the year.
e. Determine whether overhead was underapplied or overapplied for the year and by how much.
167
162) Warrenfeltz Incorporated makes a single product—a cooling coil used in commercial
refrigerators. The company has a standard cost system in which it applies overhead to this product
based on the standard labor-hours allowed for the actual output of the period. Data concerning the
most recent year appear below:
Budgeted (Planned) Overhead:
Budgeted variable manufacturing overhead
$35,125
Budgeted fixed manufacturing overhead
90,875
Total budgeted manufacturing overhead
$126,000
Budgeted production (a)
25,000
units
Standard hours per unit (b)
0.50
labor-hours
Budgeted hours (a) × (b)
12,500
labor-hours
Applying Overhead:
Actual production (a)
23,000
units
Standard hours per unit (b)
0.50
labor-hours
Standard hours allowed for the actual production (a) × (b)
11,500
labor-hours
Actual Overhead and Hours:
Actual variable manufacturing overhead
$26,536
Actual fixed manufacturing overhead
71,875
Total actual manufacturing overhead
$98,411
Actual hours
10,700
labor-hours
Required:
a. Compute the variable component of the company’s predetermined overhead rate.
b. Compute the fixed component of the company’s predetermined overhead rate.
c. Compute the company’s predetermined overhead rate.
d. Determine the variable overhead rate variance for the year.
e. Determine the variable overhead efficiency variance for the year.
f. Determine the fixed overhead budget variance for the year.
g. Determine the fixed overhead volume variance for the year.
163) You have just been hired as the controller of the Eastern Division of Global Manufacturing.
Performance records for last year are incomplete, with only the following data available:
Variable overhead rate
$3.00
per direct labor-hour
Budgeted fixed manufacturing overhead
$84,800
Total actual overhead cost
$262,500
Fixed overhead budget variance
$7,200
unfavorable
Variable overhead efficiency variance
$15,000
unfavorable
Actual direct labor-hours worked
55,000
direct labor-hours
Denominator activity level
53,000
direct labor-hours
Standard hours per unit
2
direct labor-hours
Required:
Prepare a complete analysis of manufacturing overhead for the past year. Indicate actual, standard,
and denominator activity levels; variable overhead rate and efficiency variances; and fixed
manufacturing overhead budget and volume variances.
171
164) Birkland Incorporated makes a single product—a critical part used in commercial airline
seats. The company has a standard cost system in which it applies overhead to this product based
on the standard labor-hours allowed for the actual output of the period. Data concerning the most
recent year appear below:
Budgeted (Planned) Overhead:
Budgeted variable manufacturing overhead
$137,670
Budgeted fixed manufacturing overhead
278,460
Total budgeted manufacturing overhead
$416,130
Budgeted production (a)
30,000
units
Standard hours per unit (b)
1.30
labor-hours
Budgeted hours (a) × (b)
39,000
labor-hours
Applying Overhead:
Actual production (a)
26,000
units
Standard hours per unit (b)
1.30
labor-hours
Standard hours allowed for the actual production (a) × (b)
33,800
labor-hours
Actual Overhead and Hours:
Actual variable manufacturing overhead
$87,185
Actual fixed manufacturing overhead
261,460
Total actual manufacturing overhead
$348,645
Actual hours
32,900
labor-hours
Actual variable overhead rate
$2.65
per labor-hour
Required:
a. Compute the variable component of the company’s predetermined overhead rate.
b. Compute the fixed component of the company’s predetermined overhead rate.
c. Compute the company’s predetermined overhead rate.
d. Determine the variable overhead rate variance for the year.
e. Determine the variable overhead efficiency variance for the year.
f. Determine the fixed overhead budget variance for the year.
g. Determine the fixed overhead volume variance for the year.
174
165) Khat Incorporated makes a single product—a cooling coil used in commercial refrigerators.
The company has a standard cost system in which it applies overhead to this product based on the
standard labor-hours allowed for the actual output of the period. Data concerning the most recent
year appear below:
Budgeted (Planned) Overhead:
Budgeted variable manufacturing overhead
$42,450
Budgeted fixed manufacturing overhead
71,700
Total budgeted manufacturing overhead
$114,150
Budgeted production (a)
30,000
units
Standard hours per unit (b)
0.50
labor-hours
Budgeted hours (a) × (b)
15,000
labor-hours
Applying Overhead:
Actual production (a)
35,000
units
Standard hours per unit (b)
0.50
labor-hours
Standard hours allowed for the actual production (a) × (b)
17,500
labor-hours
Actual Overhead and Hours:
Actual variable manufacturing overhead
$64,125
Actual fixed manufacturing overhead
89,700
Total actual manufacturing overhead
$153,825
Actual hours
17,100
labor-hours
Required:
Determine whether overhead was underapplied or overapplied for the year and by how much.
166) Gaters Incorporated makes a single product—an electrical motor used in many long-haul
trucks. The company has a standard cost system in which it applies overhead to this product based
on the standard labor-hours allowed for the actual output of the period. Data concerning the most
recent year appear below:
Budgeted (Planned) Overhead:
Budgeted variable manufacturing overhead
$68,800
Budgeted fixed manufacturing overhead
203,200
Total budgeted manufacturing overhead
$272,000
Budgeted production (a)
20,000
units
Standard hours per unit (b)
2.00
labor-hours
Budgeted hours (a) × (b)
40,000
labor-hours
Applying Overhead:
Actual production (a)
15,000
units
Standard hours per unit (b)
2.00
labor-hours
Standard hours allowed for the actual production (a) × (b)
30,000
labor-hours
The company incurred a total of $240,080 in manufacturing overhead cost during the year.
Required:
Determine whether overhead was underapplied or overapplied for the year and by how much.
Predetermined overhead rate (a)
(b)
Manufacturing overhead applied (a) × (b)
Total actual manufacturing overhead
overapplied