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The condensed form of Nordstrop Company's flexible budget for manufacturing overhead follows: Cost Formula (per machine- Overhead Costs Variable cost Fixed cost Total overhead cost hour) Number of units produced Actual machine-hours Actual variable overhead costs Actual fixed overhead costs $2.00 Machine-Hours 2,300 9,000 $ 17,800 $ 28,000 8,000 9,000 $ 16,000 $ 18,000 26,400 26,400 $ 42,400 $ 44,400 $ 46,400 The following information is available for a recent period: a. The denominator activity of 8,000 machine-hours was chosen to compute the predetermined overhead rate. b. At the 8,000 standard machine-hours level of activity, the company should produce 2,000 units of product. c. The company's actual operating results were as follows: 10,000 $20,000 26,400

The condensed form of Nordstrop Company's flexible budget for manufacturing overhead follows: Cost Formula (per machine- Overhead Costs Variable cost Fixed cost Total overhead cost hour) Number of units produced Actual machine-hours Actual variable overhead costs Actual fixed overhead costs $2.00 Machine-Hours 2,300 9,000 $ 17,800 $ 28,000 8,000 9,000 $ 16,000 $ 18,000 26,400 26,400 $ 42,400 $ 44,400 $ 46,400 The following information is available for a recent period: a. The denominator activity of 8,000 machine-hours was chosen to compute the predetermined overhead rate. b. At the 8,000 standard machine-hours level of activity, the company should produce 2,000 units of product. c. The company's actual operating results were as follows: 10,000 $20,000 26,400

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
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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Required: 1. Compute the predetermined overhead rate and break it down into variable and fixed cost elements. (Round your answers to 2 decimal places.) Predetermined overhead rate Variable rate Fixed rate 2. What were the standard hours allowed for the year's actual output? (Do not round intermediate calculations.) Standard hours for actual production per MH per MH per MH Variable overhead spending variance Variable overhead efficiency variance Fixed overhead budget variance Fixed overhead volume variance MHs 3. Compute the variable overhead spending and efficiency variances and the fixed overhead budget and volume variances. (Do not round intermediate calculations. Round your answers to 2 decimal places. Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)
Transcribed Image Text:Required: 1. Compute the predetermined overhead rate and break it down into variable and fixed cost elements. (Round your answers to 2 decimal places.) Predetermined overhead rate Variable rate Fixed rate 2. What were the standard hours allowed for the year's actual output? (Do not round intermediate calculations.) Standard hours for actual production per MH per MH per MH Variable overhead spending variance Variable overhead efficiency variance Fixed overhead budget variance Fixed overhead volume variance MHs 3. Compute the variable overhead spending and efficiency variances and the fixed overhead budget and volume variances. (Do not round intermediate calculations. Round your answers to 2 decimal places. Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).)
The condensed form of Nordstrop Company's flexible budget for manufacturing overhead follows: Cost Formula (per machine- hour) Overhead Costs Variable cost Fixed cost Total overhead cost Number of units produced Actual machine-hours $2.00 Actual variable overhead costs Actual fixed overhead costs Machine-Hours The following information is available for a recent period: a. The denominator activity of 8,000 machine-hours was chosen to compute the predetermined overhead rate. b. At the 8,000 standard machine-hours level of activity, the company should produce 2,000 units of product. c. The company's actual operating results were as follows: 2,300 9,000 $ 17,800 $ 28,000 8,000 $ 16,000 26,400 $ 42,400 $ 44,400 9,000 10,000 $ 18,000 $20,000 26,400 26,400 $46,400
Transcribed Image Text:The condensed form of Nordstrop Company's flexible budget for manufacturing overhead follows: Cost Formula (per machine- hour) Overhead Costs Variable cost Fixed cost Total overhead cost Number of units produced Actual machine-hours $2.00 Actual variable overhead costs Actual fixed overhead costs Machine-Hours The following information is available for a recent period: a. The denominator activity of 8,000 machine-hours was chosen to compute the predetermined overhead rate. b. At the 8,000 standard machine-hours level of activity, the company should produce 2,000 units of product. c. The company's actual operating results were as follows: 2,300 9,000 $ 17,800 $ 28,000 8,000 $ 16,000 26,400 $ 42,400 $ 44,400 9,000 10,000 $ 18,000 $20,000 26,400 26,400 $46,400
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