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# Budgeted one tenth of a machine hour is budgeted per

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Unformatted text preview: n is 198,000 units of output. Budgeted One-tenth of a machine hour is budgeted per unit of output. The budgeted fixed overhead cost One-tenth rate is \$30 per machine hour. rate Compute the fixed overhead spending and production volume variance: Compute Step 3, compute the variances (indicate favorable or unfavorable): Step Actual costs incurred Budgeted FOH (200,000 * .10 * \$30 (from step 1) (200,000 FLEX: Bud Input for actual FLEX: output * Bud Rate output (198,000 * .10 * \$30) (198,000 \$575,000 \$575,000 \$600,000 \$594,000 \$25,000 F FOH Spending \$6,000 U FOH Efficiency Chapter 8 Flexible Budgets, Overhead Cost Variances and Management Control Management Compute the under/over allocated overhead: Variable Variable 352,000 297,000 55,000 Fixed Fixed 575,000 594,000 (19,000) Total 927,000 891,000 891,000 36,000 Actual overhead incurred Less Allocated overhead Under (over) allocated Because total overhead is underallocated by \$36,000 the total Because overhead variance is \$36,000 unfavorable. overhead...
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