The loan department of Calgary Bank uses standard costs to determine the overhead cost of processing loan applications. During the current month, a fire occurred, and the accounting records for the department were mostly destroyed. The following data were salvaged from the ashes. Standard variable overhead rate per hour $9 Standard hours per application 3 Standard hours allowed 4,980 Standard fixed overhead rate per hour $7 Actual fixed overhead cost $35,630 Variable overhead budget based on standard hours allowed
The loan department of Calgary Bank uses standard costs to determine the overhead cost of processing loan applications. During the current month, a fire occurred, and the accounting records for the department were mostly destroyed. The following data were salvaged from the ashes. Standard variable overhead rate per hour $9 Standard hours per application 3 Standard hours allowed 4,980 Standard fixed overhead rate per hour $7 Actual fixed overhead cost $35,630 Variable overhead budget based on standard hours allowed
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
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The loan department of Calgary Bank uses
Standard variable overhead rate per hour | $9 | ||
Standard hours per application | 3 | ||
Standard hours allowed | 4,980 | ||
Standard fixed overhead rate per hour | $7 | ||
Actual fixed overhead cost | $35,630 | ||
Variable overhead budget based on standard hours allowed | $18,300 | ||
Fixed overhead budget | $35,630 | ||
Overhead controllable variance | $1,000 | U |
(a)
Determine the following.
(1) | Total actual overhead cost | $
|
||||
(2) | Actual variable overhead cost | $
|
||||
(3) | Variable overhead costs applied | $
|
||||
(4) | Fixed overhead costs applied | $
|
||||
(5) | Overhead volume variance | $
|
|
(b)
Determine how many loans were processed.
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