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Silverstone's production budget for July called for making 39,300 units of a single product. The firm's...

Silverstone's production budget for July called for making 39,300 units of a single product. The firm's production standards allow one-half of a machine hour per unit produced. The fixed overhead budget for July was $34,584. Silverstone uses an absorption costing system. Actual activity and costs for July were: Units produced 35,774 Fixed overhead costs incurred $ 37,200 Required: Calculate the predetermined fixed overhead application rate per machine hour that would be used in July. (Round your answer to 2 decimal places.) Calculate the number of machine hours that would be allowed for actual July production. Calculate the fixed overhead applied to work in process during July. (Do not round intermediate calculations.) Calculate the over- or underapplied fixed overhead for July. (Do not round intermediate calculations.) Calculate the fixed overhead budget and volume variances for July. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

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Answer #1
Calculate the predetermined fixed overhead application rate that would be used in March
1.76 (34584)/(39300*0.50)
Predetermined Overhead Rate 1.76
Calculate the number of machine hours that would be allowed for actual March production.
Machine Hours Allowed 17,887.00 per machine hour
35774*0.5
Calculate the fixed overhead applied to work in process during March
Applied Overhead 31,481.12
17887*1.76
Calculate the over- or underapplied fixed overhead for March
Underapplied 5,718.88
37200_31481.12
Calculate the fixed overhead budget and volume variances for March.
Fixed overhead budget variance 2,616.00 U
Fixed overhead volume variance 3,102.88 U
Budget 37200-34584
volume (19650-17887)*1.76
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