What is the denominator level of activity

Reference no: EM13264236

Flick Company uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of standard direct labor-hours. The company's total budgeted variable and fixed manufacturing overhead costs at the denominator level of activity are $20,000 for variable overhead and $30,000 for fixed overhead. The predetermined overhead rate, including both fixed and variable components, is $2.50 per direct labor-hour. The standards call for two direct labor-hours per unit of output produced. Last year, the company produced 11,500 units of product and worked 22,000 direct labor-hours. Actual costs were $22,500 for variable overhead and $31,000 for fixed overhead.

Required:

a. What is the denominator level of activity?

b. What were the standard hours allowed for the output last year?

c. What was the variable overhead spending variance?

d. What was the variable overhead efficiency variance?

e. What was the fixed overhead budget variance?

f. What was the fixed overhead volume variance?

Reference no: EM13264236

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