Question

Norwall Company's budgeted variable manufacturing overhead cost is $1.05 per machine-hour and its budgeted fixed manufacturing overhead is $27,094 per month. The following information is available for a recent month: a. The denominator activity of 8,740 machine-hours is used to compute the predetermined overhead rate. b. At a denominator activity of 8,740 machine-hours, the company should produce 3,800 units of product. c. The company's actual operating results were: Number of units produced 4,220 Actual machine-hours 10,050 Actual variable manufacturing overhead cost $ 12,060.00 Actual fixed manufacturing overhead cost $ 26,400.00 Required: 1. Compute the predetermined overhead rate and break it down into variable and fixed cost elements. (Round your answers to 2 decimal places.) 2. Compute the standard hours allowed for the actual production 3. Compute the variable overhead rate and efficiency variances and the fixed overhead budget and volume variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Round your intermediate calculations and final answers to 2 decimal places.) 1. Predetermined overhead rate per MH 1. Variable element per MH 1. Fixed element per MH 2. Standard hours allowed for the actual production MHs 3. Variable overhead rate variance 3. Variable overhead efficiency variance 3. Fixed overhead budget variance 3. Fixed overhead volume variance 

          Norwall Company's budgeted variable manufacturing overhead cost is $1.05 per machine-hour and its budgeted fixed manufacturing
overhead is $27,094 per month.
The following information is available for a recent month:
a. The denominator activity of 8,740 machine-hours is used to compute the predetermined overhead rate.
b. At a denominator activity of 8,740 machine-hours, the company should produce 3,800 units of product.
c. The company's actual operating results were:
Number of units produced                    4,220
Actual machine-hours                       10,050
Actual variable manufacturing overhead cost  $ 12,060.00
Actual fixed manufacturing overhead cost     $ 26,400.00
Required:
1. Compute the predetermined overhead rate and break it down into variable and fixed cost elements. (Round your answers to 2
decimal places.)
2. Compute the standard hours allowed for the actual production
3. Compute the variable overhead rate and efficiency variances and the fixed overhead budget and volume variances. (Indicate the
effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all
amounts as positive values. Round your intermediate calculations and final answers to 2 decimal places.)
1. Predetermined overhead rate                 per MH
1. Variable element                            per MH
1. Fixed element                              per MH
2. Standard hours allowed for the actual production MHs
3. Variable overhead rate variance
3. Variable overhead efficiency variance
3. Fixed overhead budget variance
3. Fixed overhead volume variance
Show more…
Norwall Company's budgeted variable manufacturing overhead cost is 1.05 per machine-hour and its budgeted fixed manufacturing overhead is27,094 per month. The following information is available for a recent month: a. The denominator activity of 8,740 machine-hours is used to compute the predetermined overhead rate. b. At a denominator activity of 8,740 machine-hours, the company should produce 3,800 units of product. c. The company's actual operating results were: Number of units produced 4,220 Actual machine-hours 10,050 Actual variable manufacturing overhead cost 12,060.00 Actual fixed manufacturing overhead cost 26,400.00 Required: 1. Compute the predetermined overhead rate and break it down into variable and fixed cost elements. (Round your answers to 2 decimal places.) 2. Compute the standard hours allowed for the actual production 3. Compute the variable overhead rate and efficiency variances and the fixed overhead budget and volume variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Round your intermediate calculations and final answers to 2 decimal places.) 1. Predetermined overhead rate per MH 1. Variable element per MH 1. Fixed element per MH 2. Standard hours allowed for the actual production MHs 3. Variable overhead rate variance 3. Variable overhead efficiency variance 3. Fixed overhead budget variance 3. Fixed overhead volume variance

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Horngren’s Cost Accounting
Horngren’s Cost Accounting
Srikant M. Datar, Madhav V. Rajan 16th Edition
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Please help with requirements 1-3. Overhead is $27,094 per month. The following information is available for a recent month: a. The denominator activity of 8.740 machine-hours is used to compute the predetermined overhead rate. b. At a denominator activity of 8.740 machine-hours, the company should produce 3,800 units of product. c. The company's actual operating results were: Number of units produced: 4,220 Actual machine-hours: 10,050 Actual variable manufacturing overhead cost: $12,060.00 Actual fixed manufacturing overhead cost: $26,400.00 Required: 1. Compute the predetermined overhead rate and break it down into variable and fixed cost elements. Round your answers to 2 decimal places. 2. Compute the standard hours allowed for the actual production. 3. Compute the variable overhead rate and efficiency variances, and the fixed overhead budget and volume variances. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Round your intermediate calculations and final answers to 2 decimal places. Predetermined overhead rate: 1. Variable element 2. Fixed element Standard hours allowed for the actual production Variable overhead rate variance Variable overhead efficiency variance Fixed overhead budget variance Fixed overhead volume variance Per MH Per MH Per MH MHS
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Transcript

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00:01 So here in a question, we need to calculate different things and tell they are favorable or not.
00:07 So first we need to calculate at a ideals price variance.
00:14 We need to calculate different variance.
00:16 So the formula is actual quantity.
00:18 So basically it is 500 liters actual quantity allowed actually quantity purchased multiplied by actual price, which is seven point thirty dollar minus standard quantity allowed.
00:34 That is 500 liters multiplied by standard price.
00:39 So seven point thirty.
00:42 So here it is we got zero dollar.
00:44 So this is none.
00:46 At b, we need to calculate the materials quantity variance materials quantity variance.
00:56 So here again the formula is standard quantity allowed, which is 7 liters multiplied by standard price, which is a 7900 units minus.
01:21 So we give it at 500 liters.
01:25 So here material quantity variance.
01:30 We got 37 ,000 liters.
01:33 So this is favorable...
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