Question

Patel and Sons, Inc., uses a standard cost system to apply overhead costs to units produced. Practical capacity for the plant is defined as 55,800 machine hours per year, which represents 27,900 units of output. Annual budgeted fixed overhead costs are $279,000 and the budgeted variable overhead cost rate is $3.90 per unit. Factory overhead costs are applied on the basis of standard machine hours allowed for units produced. Budgeted and actual output for the year was 21,700 units, which took 44,800 machine hours. Actual fixed overhead costs for the year amounted to $272,000 while the actual variable overhead cost per unit was $3.80.

3)

Based on the information provided above, what was the fixed overhead spending (budget) variance for the year?

Spending (budget) variance

Favorable

What was the fixed overhead production volume variance for the year? (Do not round intermediate calculations. Round final answer to the nearest whole dollar amount.)

Production volume variance

Unfavorable

4)

Based on the information provided above, what was the variable overhead spending variance for the year? (Do not round intermediate calculations. Round your final answer to nearest whole dollar amount.)

Spending Variance

Favorable

What was the variable overhead efficiency variance for the year? (Do not round intermediate calculations. Round your final answer to nearest whole dollar amount.)

Efficiency Variance

Unfavorable

Answer 1