# Required calculate the following three overhead

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Exercises sol (2) Budgeting (Chapters 6,12, and 13) 14.02.2020 11 Expected overhead \$204,000 [\$61,200 (fixed) + \$142.800 (variable)] Expected volume 8,000 units or 24,000 direct labor hours (dl hrs) Overhead rate \$204,000 ÷ 24,000 dl hrs = \$8.50 per dl hr Variable overhead rate \$142,800 ÷ 24,000 dl hrs = \$5.95 per dl hr Standard volume 3 dl hrs × 8,500 units = 25,500 dl hours Flexible budget = \$61,200 + \$5.95 per dl hr × direct labor hours Overhead spending variance = \$220,500 - (\$61,200 + \$5.95 × 26,200 dl hrs) \$3,410 unfavorable Overhead efficiency variance = \$5.95 per dl hr × (actual volume - standard volume) \$5.95 × (26,200 - 25,500) \$4,165 unfavorable Overhead volume variance = flexible budget at standard volume-overhead absorbed (\$61,200 + \$5.95 × 25,500) - \$8.50 × 25,500 \$3,825 favorable

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