1. Compute the standard overhead rate. Hint.: Standard allocation base at 80% capacity is 20,000 DLH, computed as 10,000 units × 2.00 DLH per unit. 2. Compute the total overhead variance. 3. Compute the overhead controllable variance. 4. Compute the overhead volume variance.

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Chapter10: Standard Costing And Variance Analysis
Section: Chapter Questions
Problem 72P: Moleno Company produces a single product and uses a standard cost system. The normal production...
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Blaze Corporation allocates overhead on the basis of DLH and the standard amount per allocation base is 2 DLH per unit.
For March, the company planned production of 10,000 units (80% of its production capacity of 12,500 units) and prepared
the following budget. The company actually operated at 90% capacity (11,250 units) in March and incurred actual total
overhead costs of $129,230.
80% Operating
Levels
Overhead Budget
Production in units
10,000
Budgeted variable overhead
Budgeted fixed overhead
$ 58,000
$ 68,000
1. Compute the standard overhead rate. Hint. Standard allocation base at 80% capacity is 20,000 DLH, computed as
10,000 units 2.00 DLH per unit.
2. Compute the total overhead variance.
3. Compute the overhead controllable variance.
4. Compute the overhead volume variance.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Required 3
Required 4
Compute the overhead controllable variance. (Indicate the effect of the variance by selecting favorable, unfavorable, or no
variance. Do not round intermediate calculations.)
Controllable Variance
Actual total overhead
Budgeted flexible overhead
Total
Controllable variance
< Required 2
Required 4
>
Transcribed Image Text:Blaze Corporation allocates overhead on the basis of DLH and the standard amount per allocation base is 2 DLH per unit. For March, the company planned production of 10,000 units (80% of its production capacity of 12,500 units) and prepared the following budget. The company actually operated at 90% capacity (11,250 units) in March and incurred actual total overhead costs of $129,230. 80% Operating Levels Overhead Budget Production in units 10,000 Budgeted variable overhead Budgeted fixed overhead $ 58,000 $ 68,000 1. Compute the standard overhead rate. Hint. Standard allocation base at 80% capacity is 20,000 DLH, computed as 10,000 units 2.00 DLH per unit. 2. Compute the total overhead variance. 3. Compute the overhead controllable variance. 4. Compute the overhead volume variance. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute the overhead controllable variance. (Indicate the effect of the variance by selecting favorable, unfavorable, or no variance. Do not round intermediate calculations.) Controllable Variance Actual total overhead Budgeted flexible overhead Total Controllable variance < Required 2 Required 4 >
Blaze Corporation allocates overhead on the basis of DLH and the standard amount per allocation base is 2 DLH per unit.
For March, the company planned production of 10,000 units (80% of its production capacity of 12,500 units) and prepared
the following budget. The company actually operated at 90% capacity (11,250 units) in March and incurred actual total
overhead costs of $129,230.
80% Operating
Levels
Overhead Budget
Production in units
10,000
Budgeted variable overhead
Budgeted fixed overhead
$ 58,000
$ 68,000
1. Compute the standard overhead rate. Hint. Standard allocation base at 80% capacity is 20,000 DLH, computed as
10,000 units × 2.00 DLH per unit.
2. Compute the total overhead variance.
3. Compute the overhead controllable variance.
4. Compute the overhead volume variance.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Required 3
Required 4
Compute the overhead volume variance. (Indicate the effect of the variance by selecting favorable, unfavorable, or no
variance. Do not round intermediate calculations.)
Volume Variance
Volume variance
< Required 3
Required 4
Transcribed Image Text:Blaze Corporation allocates overhead on the basis of DLH and the standard amount per allocation base is 2 DLH per unit. For March, the company planned production of 10,000 units (80% of its production capacity of 12,500 units) and prepared the following budget. The company actually operated at 90% capacity (11,250 units) in March and incurred actual total overhead costs of $129,230. 80% Operating Levels Overhead Budget Production in units 10,000 Budgeted variable overhead Budgeted fixed overhead $ 58,000 $ 68,000 1. Compute the standard overhead rate. Hint. Standard allocation base at 80% capacity is 20,000 DLH, computed as 10,000 units × 2.00 DLH per unit. 2. Compute the total overhead variance. 3. Compute the overhead controllable variance. 4. Compute the overhead volume variance. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute the overhead volume variance. (Indicate the effect of the variance by selecting favorable, unfavorable, or no variance. Do not round intermediate calculations.) Volume Variance Volume variance < Required 3 Required 4
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