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Reed Company uses a standard costing system. Manufacturing overhead is applied to products based upon machine hours, Use the following information to make the required calculations:
Calculate:
a) budgeted machine hours allowed for the actual output of 18,000 units
b) denominator machine hours
c) fixed overhead rate per unit AND machine hour
d) actual variable overhead cost
e) variable overhead efficiency variance
f) fixed overhead spending variance
g) production volume variance
h) over or underapplied variable overhead (make sure you indicate whether it is over or under)
i) over or underapplied fixed overhead (make sure you indicate whether it is over or under)
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