Compute the fixed overhead spending and efficiency variance

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Tules Company is planning to produce 2,400,000 power drills for the coming year. The company uses direct labour hours to assign overhead to products. Each drill requires 0.5 standard hour of labour for completion. The total budgeted overhead was $2,700,000. The total fixed overhead budgeted for the coming year is $1,320,000. Predetermined overhead rates are calculated using expected production, measured in direct labour hours.

Actual results for the year are:

Actual production (units) 2,360,000
Actual direct labour hours 1,190,000
Actual variable overhead $1,410,000
Actual fixed overhead $1,260,000

Required:

Problem 1. Compute the applied fixed overhead.

Problem 2. Compute the fixed overhead spending and efficiency variances.

Problem 3. Compute the applied variable overhead.

Problem 4. Compute the variable overhead spending and volume variances.

Reference no: EM132907786

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