Last year, Gladner Company had planned to produce 140,000 units. However, 143,000 units were actually produced. The company uses direct labor hours to assign overhead to products. Each unit requires 0.9 standard hour of labor for completion. The fixed overhead rate was $11 per direct labor hour, and the variable overhead rate was $6.36 per direct labor hour. The following variances were computed: Fixed overhead spending variance $24,000 U Variable overhead spending variance $9,196 U Fixed overhead volume variance 29,700 F Variable overhead efficiency variance 1,272 U Required: Calculate the total applied fixed overhead. Calculate the budgeted fixed overhead. Calculate the actual fixed overhead. Calculate the total applied variable overhead. Calculate the number of actual direct labor hours. Calculate the actual variable overhead.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Last year, Gladner Company had planned to produce 140,000 units. However, 143,000 units were actually produced. The company uses direct labor hours to assign
The following variances were computed:
| Fixed overhead spending variance | $24,000 U | Variable overhead spending variance | $9,196 U | |
| Fixed overhead volume variance | 29,700 F | Variable overhead efficiency variance | 1,272 U |
Required:
-
Calculate the total applied fixed overhead.
-
Calculate the budgeted fixed overhead.
-
Calculate the actual fixed overhead.
-
Calculate the total applied variable overhead.
-
Calculate the number of actual direct labor hours.
-
Calculate the actual variable overhead.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
