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Walkenhorst Company's machining department prepared its 2022 budget based on the following data: Practical capacity Standard machine hours per unit Standard variable factory overhead Budgeted fixed factory overhead 40,000 units 2 $ 3.00 per machine hour $440,000 The department uses machine hours to apply factory overhead to production. In 2022, the department used 86,000 machine hours and incurred $700,000 in total manufacturing overhead cost to manufacture 42,090 units. Actual fixed overhead cost for the year was $453,000. Required: Determine for the year: 1. The predetermined fixed, variable, and total factory overhead application rates (per machine hour). (Round your answers to 2 decimal places.) 2. The total factory overhead cost in the flexible budget based on output achieved in 2022. 3. The fixed overhead volume variance. State whether this variance was favorable (F) or unfavorable (U). 4. The variable overhead efficiency variance. State whether this variance was favorable (F) or unfavorable (U). 5. The variable overhead spending (rate) variance and the fixed overhead spending (budget) variance. State whether each variance is favorable (F) or unfavorable (U). 1. Predetermined fixed overhead application rate Predetermined variable overhead application rate Total predetermined factory overhead application rate 2. Total overhead cost in the flexible budget 3. Fixed overhead volume variance 4. Variable overhead efficiency variance 5. Variable overhead spending (rate) variance Fixed overhead spending (budget) variance

Walkenhorst Company's machining department prepared its 2022 budget based on the following data: Practical capacity Standard machine hours per unit Standard variable factory overhead Budgeted fixed factory overhead 40,000 units 2 $ 3.00 per machine hour $440,000 The department uses machine hours to apply factory overhead to production. In 2022, the department used 86,000 machine hours and incurred $700,000 in total manufacturing overhead cost to manufacture 42,090 units. Actual fixed overhead cost for the year was $453,000. Required: Determine for the year: 1. The predetermined fixed, variable, and total factory overhead application rates (per machine hour). (Round your answers to 2 decimal places.) 2. The total factory overhead cost in the flexible budget based on output achieved in 2022. 3. The fixed overhead volume variance. State whether this variance was favorable (F) or unfavorable (U). 4. The variable overhead efficiency variance. State whether this variance was favorable (F) or unfavorable (U). 5. The variable overhead spending (rate) variance and the fixed overhead spending (budget) variance. State whether each variance is favorable (F) or unfavorable (U). 1. Predetermined fixed overhead application rate Predetermined variable overhead application rate Total predetermined factory overhead application rate 2. Total overhead cost in the flexible budget 3. Fixed overhead volume variance 4. Variable overhead efficiency variance 5. Variable overhead spending (rate) variance Fixed overhead spending (budget) variance

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter9: Evaluating Variances From Standard Costs
Section: Chapter Questions
Problem 3E: Salisbury Bottle Company manufactures plastic two-liter bottles for the beverage industry. The cost...
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Walkenhorst Company's machining department prepared its 2022 budget based on the following data: Practical capacity Standard machine hours per unit Standard variable factory overhead Budgeted fixed factory overhead 40,000 units 2 $ 3.00 per machine hour $ 440,000 The department uses machine hours to apply factory overhead to production. In 2022, the department used 86,000 machine hours and incurred $700,000 in total manufacturing overhead cost to manufacture 42,090 units. Actual fixed overhead cost for the year was $453,000. Required: Determine for the year: 1. The predetermined fixed, variable, and total factory overhead application rates (per machine hour). (Round your answers to 2 decimal places.) 2. The total factory overhead cost in the flexible budget based on output achieved in 2022. 3. The fixed overhead volume variance. State whether this variance was favorable (F) or unfavorable (U). 4. The variable overhead efficiency variance. State whether this variance was favorable (F) or unfavorable (U). 5. The variable overhead spending (rate) variance and the fixed overhead spending (budget) variance. State whether each variance is favorable (F) or unfavorable (U). 1. Predetermined fixed overhead application rate Predetermined variable overhead application rate Total predetermined factory overhead application rate 2. Total overhead cost in the flexible budget 3. Fixed overhead volume variance 4. Variable overhead efficiency variance 5. Variable overhead spending (rate) variance Fixed overhead spending (budget) variance
Transcribed Image Text:Walkenhorst Company's machining department prepared its 2022 budget based on the following data: Practical capacity Standard machine hours per unit Standard variable factory overhead Budgeted fixed factory overhead 40,000 units 2 $ 3.00 per machine hour $ 440,000 The department uses machine hours to apply factory overhead to production. In 2022, the department used 86,000 machine hours and incurred $700,000 in total manufacturing overhead cost to manufacture 42,090 units. Actual fixed overhead cost for the year was $453,000. Required: Determine for the year: 1. The predetermined fixed, variable, and total factory overhead application rates (per machine hour). (Round your answers to 2 decimal places.) 2. The total factory overhead cost in the flexible budget based on output achieved in 2022. 3. The fixed overhead volume variance. State whether this variance was favorable (F) or unfavorable (U). 4. The variable overhead efficiency variance. State whether this variance was favorable (F) or unfavorable (U). 5. The variable overhead spending (rate) variance and the fixed overhead spending (budget) variance. State whether each variance is favorable (F) or unfavorable (U). 1. Predetermined fixed overhead application rate Predetermined variable overhead application rate Total predetermined factory overhead application rate 2. Total overhead cost in the flexible budget 3. Fixed overhead volume variance 4. Variable overhead efficiency variance 5. Variable overhead spending (rate) variance Fixed overhead spending (budget) variance
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