Wangerin Corporation applies overhead to products based on machine-hours. The denominator level of activity is 6,900 machine-hours. The budgeted fixed manufacturing overhead costs are $240,810. In April, the actual fixed manufacturing overhead costs were $245,640 and the standard machine-hours allowed for the actual output were 7,200 machine-hours.Required:a. Compute the budget variance for April.b. Compute the volume variance for April.
What will be an ideal response?
a.
Budget variance = Actual fixed manufacturing overhead cost ? Budgeted fixed manufacturing overhead cost= $245,640 ? $240,810 = $4,830 U
b.
Fixed portion of the predetermined overhead rate= $240,810 ÷ 6,900 machine-hours = $34.90 per machine-hour
Volume variance = Fixed portion of the predetermined overhead rate × (Denominator hours ? Standard hours allowed)
= $34.90 per machine-hour × (6,900machine-hours ? 7,200machine-hours)
= $34.90 per machine-hour × (?300machine-hours)
= $10,470 F
You might also like to view...
One of the main factors to consider when using a cost-based transfer price is whether to use actual or standard costs
Indicate whether the statement is true or false
Ordinarily, "ignorance of the law" is a valid defense to criminal liability
a. True b. False Indicate whether the statement is true or false
Transaction logs are permanent records of transactions created to preserve audit trails in a computerized environment.
Answer the following statement true (T) or false (F)
Feedback can be verbal or nonverbal through the use of paraphrasing, questioning, nodding, gesturing, or even eye movement.
Answer the following statement true (T) or false (F)