Question: Held Incorporated makes a single product--an electrical motor used in many long-haul trucks. The company has a standard cost system in which it applies overhead to this product based on the standard machine-hours allowed for the actual output of the period. Data concerning the most recent year appear below:
| Budgeted (Planned) Overhead: |
|
|
| Budgeted variable manufacturing overhead |
$65,520 |
|
| Budgeted fixed manufacturing overhead |
256,165 |
|
| Total budgeted manufacturing overhead |
$321,685 |
|
|
|
|
| Budgeted production (a) |
35,000 |
units |
| Standard hours per unit (b) |
1.3 |
machine-hours |
| Budgeted hours (a) × (b) |
45,500 |
machine-hours |
|
|
|
| Applying Overhead: |
|
|
| Actual production (a) |
36,000 |
units |
| Standard hours per unit (b) |
1.3 |
machine-hours |
| Standard hours allowed for the actual production (a) × (b) |
46,800 |
machine-hours |
|
|
|
| Actual Overhead and Hours: |
|
|
| Actual variable manufacturing overhead |
$93,528 |
|
| Actual fixed manufacturing overhead |
240,165 |
|
| Total actual manufacturing overhead |
$333,693 |
|
| Actual hours |
43,300 |
machine-hours |
| Actual variable overhead rate |
$2.16 |
per machine-hour |
Required:
a. Determine the variable overhead rate variance for the year.
b. Determine the variable overhead efficiency variance for the year.
c. Determine the fixed overhead budget variance for the year.
d. Determine the fixed overhead volume variance for the year.
Show your work. Round to the nearest 2 decimal points