Class_Answers_Tuesday_Ch11

Class_Answers_Tuesday_Ch11 - Exercise 11-11 (20 minutes) 1....

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Exercise 11-11  (20 minutes) 1. $33,200 Overall rate:  =$4.15 per MH 8,000 MHs $8,400 Variable rate:  =$1.05 per MH 8,000 MHs $24,800 Fixed rate:  =$3.10 per MH 8,000 MHs 2. The standard hours per unit of product are: 8,000 MHs ÷ 3,200 units = 2.5 MHs per unit The standard hours allowed for the actual production would be: 3,500 units × 2.5 MHs per unit = 8,750 MHs 3. Variable overhead  spending variance = (AH × AR) – (AH × SR) = ($9,860) – (8,500 MHs × $1.05 per MH) = ($9,860) – ($8,925) = $935 U Variable overhead  efficiency variance = SR (AH – SH) = $1.05 per MH (8,500 MHs – 8,750 MHs)  = $262.50 F
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 (continued) Fixed overhead budget and volume variances: Actual Fixed  Overhead  Cost Budgeted Fixed  Overhead Cost Fixed Overhead Cost  Applied to  Work in Process $25,100 $24,800* 8,750 standard MHs × $3.10 per MH = $27,125 Budget Variance,  $300 U Volume Variance,  $2,325 F Total Variance, $2,025 F *8,000 denominator MHs × $3.10 per MH = $24,800. Alternative approach to the budget variance: Budget Actual Fixed Budgeted Fixed =  -  Variance Overhead Cost Overhead Cost = $25,100 - $24,800 = $300 U Alternative approach to the volume variance: ( ) Fixed Portion of Volume Denominator Standard Hours = the Predetermined   -  Variance
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Class_Answers_Tuesday_Ch11 - Exercise 11-11 (20 minutes) 1....

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