Reference no: EM132886208
Question - A manufacturer of industrial equipment has a standard costing system based on machine hours (MHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:
Denominator Level of Activity 3,900 MHs
Standard Overhead Costs at the Denominator Activity Level:
Variable Overhead Cost $33,345
Fixed Overhead Cost $61,425
The following data pertain to operations for the most recent period:
Actual Hours 3,900 MHs
Standard Hours Allowed for the Actual Output 3,952 MHs
Actual Total Variable Overhead Cost $32,565
Actual Total Fixed Overhead Cost $60,675
Required -
a. Calculate the Predetermined OverHead Application Rates [POHAR], each rounded to 2 decimals?
b. Determine the fixed overhead variances.
c. How much overhead (in total), was applied to products during the period? Show the breakdown. Explain the impact of the volume variance.