Question

Palladium Inc. produces a variety of household cleaning products. Palladium’s controller has developed standard costs for the following four overhead items:

Overhead Item	Total Fixed Cost	Variable Rate per Direct Labor Hour
Maintenance	$ 86,000	$0.20
Power		0.45
Indirect labor	140,000	2.10
Rent	35,000

Assume that actual production required 93,000 direct labor hours at standard. The actual overhead costs incurred were as follows:

Maintenance	$107,000
Power	41,200
Indirect labor	336,000
Rent	35,000

Required:

Prepare a performance report for the period based on actual production. If an amount box does not require an entry, enter "0". Enter a favorable variance as a negative amount, and an unfavorable variance as a positive amount. If an amount is zero, enter "0" and choose "Not applicable" from the dropdown list.

	Performance Report
	Actual	Budgeted	Variance
Direct labor hours based on actual				Favorable
Variable overhead:
Maintenance	$	$	$	Favorable
Power				Favorable
Indirect labor				Favorable
Rent				Unfavorable
Total overhead	$	$	$	Favorabl

Answer 1

Performance Report
	Actual	Budgeted	Variance
Direct Labor Hours Based on actual	93,000.00	93,000.00
Maintenance	107,000.00	104,600.00	2,400.00	(U)
Power	41,200.00	41,850.00	650.00	(F)
Indirect Labor	336,000.00	335,300.00	700.00	(U)
Rent	35,000.00	35,000.00	-
Total Overhead	519,200.00	516,750.00	2,450.00	(U)