ucher Company uses a standard cost system in which manufacturing overhead costs are applied to units of product on the basis of standard machine-hours. The company's standards are based on variable manufacturing overhead of $3 per machine-hour and fixed manufacturing overhead of $300,000 per year. The denominator level of activity is 30,000 machine-hours. Standards call for 2.5 machine-hours per unit of output. Ac for the year are given below:
- Units produced 12,800 Units
- Machine-hours used 31,600 Machine hours
- Overhead costs incurred:
- Variable costs $96,000
- Fixed costs $297,000
Requirements
- What are the standard hours allowed for the output?
- What was the variable overhead rate variance?
- What was the variable overhead efficiency variance?
- What was the fixed manufacturing overhead budget variance?
- What was the fixed manufacturing overhead volume variance?