Question

Selected information relating to Yost Company's operations for the most recent year is given below: Activity:...

Selected information relating to Yost Company's operations for the most recent year is given below:

Activity:
Denominator activity (machine-hours) 21,300
Standard hours allowed per unit 2.3
Actual number of units produced 8,000
Costs:
Actual fixed overhead costs incurred $ 69,200
Fixed overhead budget variance $ 1,090 F

The company applies overhead cost to products on the basis of standard machine-hours.

Required:

1. What were the standard machine-hours allowed for the actual number of units produced?

2. What was the total budgeted fixed overhead cost for the period?

3. What was the fixed portion of the predetermined overhead rate? (Round "Predetermined overhead rate" to 2 decimal place.)

4. What was the fixed overhead volume variance? (Indicate the effect of variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do not round intermediate calculations.)

Homework Answers

Answer #1

Solution 1:

standard machine-hours allowed for the actual number of units produced = 8000*2.3 = 18400 hours

Solution 2:

Total budgeted fixed overhead cost for the period = Actual fixed overhead + Favorable fixed overhead budget variance

= $69,200 + $1,090 = $70,290

Solution 3:

Fixed portion of the predetermined overhead rate = Budgeted fixed overhead / Budgeted machine hours

= $70,290 / 21300 = $3.30 per machine hour

Solution 4:

Fixed overhead volume variance = fixed overhead applied - Budgeted fixed overhead

= (18400*$3.30) - $70,290 = $9,570 U

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