Fixed Overhead Variances LO10â€”4 Primara Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below: Required: Compute the fixed portion of the predetermined overhead rate for the year. Compute the fixed overhead budget variance and volume variance.

Question

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Answer 1

Textbook Question

Chapter 10A, Problem 10A.1E

Fixed Overhead Variances LO10â€”4

Primara Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below:

Chapter 10A, Problem 10A.1E, Fixed Overhead Variances LO10â€”4 Primara Corporation has a standard cost system in which it applies

Required:

Compute the fixed portion of the predetermined overhead rate for the year.
Compute the fixed overhead budget variance and volume variance.

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

1

Expert Solution

To determine

Fixed portion of the predetermined overhead rate of the year.

Introduction: Fixed overhead volume variances mean a measure that defines the difference between budgeted fixed overhead costs and actual cost of fixed overhead costs. This explains the units produced based on the standard hours allowed and standard fixed rate.

Answer to Problem 10A.1E

Fixed portion of the predetermined overhead rate=Fixed overhead Budgeted standard direct labor hourFixed portion of the predetermined overhead rate= 250,00025,000=10

Explanation of Solution

Budgeted variances = Actual fixed overhead -Budgeted fixed overheadBudgeted variances = 254,000-250,000Budgeted variances = 4,000U

2

Expert Solution

To determine

Fixed overhead budget variance and volume variance.

Introduction: Fixed overhead volume variances mean a measure that defines the difference between budgeted fixed overhead costs and actual cost of fixed overhead costs. This explains the units produced based on the standard hours allowed and standard fixed rate.

Answer to Problem 10A.1E

Fixed overhead volume varinace = [Budgeted fixed overhead for actual outputs - Standard fixed overhead allocated to production]

Fixed portion of the predetermined overhead rate=Fixed overhead Budgeted standard direct labor hourFixed portion of the predetermined overhead rate= 250,00025,000=10

Budgeted variances is $4,000U and volume variances is $10,000F

Explanation of Solution

Volume varinace = [( Fixed portion of predetermined overhead rate) ×(Budgeted standard direct labor hour -standard hours allowed)]Volume varinace = 10× (25,000-26,000)Volume varinace = 10,000F

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Answer 2

Textbook Question

Chapter 10A, Problem 10A.1E

Fixed Overhead Variances LO10â€”4

Primara Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below:

Chapter 10A, Problem 10A.1E, Fixed Overhead Variances LO10â€”4 Primara Corporation has a standard cost system in which it applies

Required:

Compute the fixed portion of the predetermined overhead rate for the year.
Compute the fixed overhead budget variance and volume variance.

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

1

Expert Solution

To determine

Fixed portion of the predetermined overhead rate of the year.

Introduction: Fixed overhead volume variances mean a measure that defines the difference between budgeted fixed overhead costs and actual cost of fixed overhead costs. This explains the units produced based on the standard hours allowed and standard fixed rate.

Answer to Problem 10A.1E

Fixed portion of the predetermined overhead rate=Fixed overhead Budgeted standard direct labor hourFixed portion of the predetermined overhead rate= 250,00025,000=10

Explanation of Solution

Budgeted variances = Actual fixed overhead -Budgeted fixed overheadBudgeted variances = 254,000-250,000Budgeted variances = 4,000U

2

Expert Solution

To determine

Fixed overhead budget variance and volume variance.

Introduction: Fixed overhead volume variances mean a measure that defines the difference between budgeted fixed overhead costs and actual cost of fixed overhead costs. This explains the units produced based on the standard hours allowed and standard fixed rate.

Answer to Problem 10A.1E

Fixed overhead volume varinace = [Budgeted fixed overhead for actual outputs - Standard fixed overhead allocated to production]

Fixed portion of the predetermined overhead rate=Fixed overhead Budgeted standard direct labor hourFixed portion of the predetermined overhead rate= 250,00025,000=10

Budgeted variances is $4,000U and volume variances is $10,000F

Explanation of Solution

Volume varinace = [( Fixed portion of predetermined overhead rate) ×(Budgeted standard direct labor hour -standard hours allowed)]Volume varinace = 10× (25,000-26,000)Volume varinace = 10,000F

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Answer 3

Textbook Question

Chapter 10A, Problem 10A.1E

Fixed Overhead Variances LO10â€”4

Primara Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below:

Chapter 10A, Problem 10A.1E, Fixed Overhead Variances LO10â€”4 Primara Corporation has a standard cost system in which it applies

Required:

Compute the fixed portion of the predetermined overhead rate for the year.
Compute the fixed overhead budget variance and volume variance.

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

1

Expert Solution

To determine

Fixed portion of the predetermined overhead rate of the year.

Introduction: Fixed overhead volume variances mean a measure that defines the difference between budgeted fixed overhead costs and actual cost of fixed overhead costs. This explains the units produced based on the standard hours allowed and standard fixed rate.

Answer to Problem 10A.1E

Fixed portion of the predetermined overhead rate=Fixed overhead Budgeted standard direct labor hourFixed portion of the predetermined overhead rate= 250,00025,000=10

Explanation of Solution

Budgeted variances = Actual fixed overhead -Budgeted fixed overheadBudgeted variances = 254,000-250,000Budgeted variances = 4,000U

2

Expert Solution

To determine

Fixed overhead budget variance and volume variance.

Introduction: Fixed overhead volume variances mean a measure that defines the difference between budgeted fixed overhead costs and actual cost of fixed overhead costs. This explains the units produced based on the standard hours allowed and standard fixed rate.

Answer to Problem 10A.1E

Fixed overhead volume varinace = [Budgeted fixed overhead for actual outputs - Standard fixed overhead allocated to production]

Fixed portion of the predetermined overhead rate=Fixed overhead Budgeted standard direct labor hourFixed portion of the predetermined overhead rate= 250,00025,000=10

Budgeted variances is $4,000U and volume variances is $10,000F

Explanation of Solution

Volume varinace = [( Fixed portion of predetermined overhead rate) ×(Budgeted standard direct labor hour -standard hours allowed)]Volume varinace = 10× (25,000-26,000)Volume varinace = 10,000F

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Answer 4

Textbook Question

Chapter 10A, Problem 10A.1E

Fixed Overhead Variances LO10â€”4

Primara Corporation has a standard cost system in which it applies overhead to products based on the standard direct labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below:

Chapter 10A, Problem 10A.1E, Fixed Overhead Variances LO10â€”4 Primara Corporation has a standard cost system in which it applies

Required:

Compute the fixed portion of the predetermined overhead rate for the year.
Compute the fixed overhead budget variance and volume variance.

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

1

Expert Solution

To determine

Fixed portion of the predetermined overhead rate of the year.

Introduction: Fixed overhead volume variances mean a measure that defines the difference between budgeted fixed overhead costs and actual cost of fixed overhead costs. This explains the units produced based on the standard hours allowed and standard fixed rate.

Answer to Problem 10A.1E

Fixed portion of the predetermined overhead rate=Fixed overhead Budgeted standard direct labor hourFixed portion of the predetermined overhead rate= 250,00025,000=10

Explanation of Solution

Budgeted variances = Actual fixed overhead -Budgeted fixed overheadBudgeted variances = 254,000-250,000Budgeted variances = 4,000U

2

Expert Solution

To determine

Fixed overhead budget variance and volume variance.

Introduction: Fixed overhead volume variances mean a measure that defines the difference between budgeted fixed overhead costs and actual cost of fixed overhead costs. This explains the units produced based on the standard hours allowed and standard fixed rate.

Answer to Problem 10A.1E

Fixed overhead volume varinace = [Budgeted fixed overhead for actual outputs - Standard fixed overhead allocated to production]

Fixed portion of the predetermined overhead rate=Fixed overhead Budgeted standard direct labor hourFixed portion of the predetermined overhead rate= 250,00025,000=10

Budgeted variances is $4,000U and volume variances is $10,000F

Explanation of Solution

Volume varinace = [( Fixed portion of predetermined overhead rate) ×(Budgeted standard direct labor hour -standard hours allowed)]Volume varinace = 10× (25,000-26,000)Volume varinace = 10,000F

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Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

1

Expert Solution

To determine

Fixed portion of the predetermined overhead rate of the year.

Introduction: Fixed overhead volume variances mean a measure that defines the difference between budgeted fixed overhead costs and actual cost of fixed overhead costs. This explains the units produced based on the standard hours allowed and standard fixed rate.

Answer to Problem 10A.1E

Fixed portion of the predetermined overhead rate=Fixed overhead Budgeted standard direct labor hourFixed portion of the predetermined overhead rate= 250,00025,000=10

Explanation of Solution

Budgeted variances = Actual fixed overhead -Budgeted fixed overheadBudgeted variances = 254,000-250,000Budgeted variances = 4,000U

2

Expert Solution

To determine

Fixed overhead budget variance and volume variance.

Introduction: Fixed overhead volume variances mean a measure that defines the difference between budgeted fixed overhead costs and actual cost of fixed overhead costs. This explains the units produced based on the standard hours allowed and standard fixed rate.

Answer to Problem 10A.1E

Fixed overhead volume varinace = [Budgeted fixed overhead for actual outputs - Standard fixed overhead allocated to production]

Fixed portion of the predetermined overhead rate=Fixed overhead Budgeted standard direct labor hourFixed portion of the predetermined overhead rate= 250,00025,000=10

Budgeted variances is $4,000U and volume variances is $10,000F

Explanation of Solution

Volume varinace = [( Fixed portion of predetermined overhead rate) ×(Budgeted standard direct labor hour -standard hours allowed)]Volume varinace = 10× (25,000-26,000)Volume varinace = 10,000F

Answer 8

1

Expert Solution

To determine

Fixed portion of the predetermined overhead rate of the year.

Introduction: Fixed overhead volume variances mean a measure that defines the difference between budgeted fixed overhead costs and actual cost of fixed overhead costs. This explains the units produced based on the standard hours allowed and standard fixed rate.

Answer to Problem 10A.1E

Fixed portion of the predetermined overhead rate=Fixed overhead Budgeted standard direct labor hourFixed portion of the predetermined overhead rate= 250,00025,000=10

Explanation of Solution

Budgeted variances = Actual fixed overhead -Budgeted fixed overheadBudgeted variances = 254,000-250,000Budgeted variances = 4,000U

Answer 9

1

Expert Solution

Answer 10

1

Expert Solution

Answer 11

Expert Solution

Answer 12

To determine

Fixed portion of the predetermined overhead rate of the year.

Introduction: Fixed overhead volume variances mean a measure that defines the difference between budgeted fixed overhead costs and actual cost of fixed overhead costs. This explains the units produced based on the standard hours allowed and standard fixed rate.

Answer 13

Answer to Problem 10A.1E

Fixed portion of the predetermined overhead rate=Fixed overhead Budgeted standard direct labor hourFixed portion of the predetermined overhead rate= 250,00025,000=10

Answer 14

Explanation of Solution

Budgeted variances = Actual fixed overhead -Budgeted fixed overheadBudgeted variances = 254,000-250,000Budgeted variances = 4,000U

Answer 15

2

Expert Solution

To determine

Fixed overhead budget variance and volume variance.

Introduction: Fixed overhead volume variances mean a measure that defines the difference between budgeted fixed overhead costs and actual cost of fixed overhead costs. This explains the units produced based on the standard hours allowed and standard fixed rate.

Answer to Problem 10A.1E

Fixed overhead volume varinace = [Budgeted fixed overhead for actual outputs - Standard fixed overhead allocated to production]

Fixed portion of the predetermined overhead rate=Fixed overhead Budgeted standard direct labor hourFixed portion of the predetermined overhead rate= 250,00025,000=10

Budgeted variances is $4,000U and volume variances is $10,000F

Explanation of Solution

Volume varinace = [( Fixed portion of predetermined overhead rate) ×(Budgeted standard direct labor hour -standard hours allowed)]Volume varinace = 10× (25,000-26,000)Volume varinace = 10,000F

Answer 16

2

Expert Solution

Answer 17

2

Expert Solution

Answer 18

Expert Solution

Answer 19

To determine

Fixed overhead budget variance and volume variance.

Introduction: Fixed overhead volume variances mean a measure that defines the difference between budgeted fixed overhead costs and actual cost of fixed overhead costs. This explains the units produced based on the standard hours allowed and standard fixed rate.

Answer 20

Answer to Problem 10A.1E

Fixed overhead volume varinace = [Budgeted fixed overhead for actual outputs - Standard fixed overhead allocated to production]

Fixed portion of the predetermined overhead rate=Fixed overhead Budgeted standard direct labor hourFixed portion of the predetermined overhead rate= 250,00025,000=10

Budgeted variances is $4,000U and volume variances is $10,000F

Answer 21

Explanation of Solution

Volume varinace = [( Fixed portion of predetermined overhead rate) ×(Budgeted standard direct labor hour -standard hours allowed)]Volume varinace = 10× (25,000-26,000)Volume varinace = 10,000F