Taylor Inc. uses a standard cost system. The company has thefollowing results for the...

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Accounting

Taylor Inc. uses a standard cost system. The company has thefollowing results for the current period:

Budget Actual
  Fixed overhead $ 160,000 $ 160,000
  Units 6,500 units 6,000 units
  Direct labour-hours (DLH) 13,333 hours 12,500 hours
Standard quantity of DLH per unit 2.0152 hours

Variable overhead is applied at $27.50 per direct labour-hour.Actual variable overhead was $310,600.

Required:
1.
Compute the fixed overhead budget variance and the volumevariance. (Indicate the effect of each variance byselecting "F" for favorable, "U" for unfavorable, and "None" for noeffect (i.e., zero variance).)
2. “Because the actual overhead and the budgeted overhead are thesame the volume variance is 0.” True or false? Showcalculations.
True
False
3.
Compute the total variable overhead variance. (Indicatethe effect of each variance by selecting "F" for favorable, "U" forunfavorable, and "None" for no effect (i.e., zerovariance).)

Answer & Explanation Solved by verified expert

4.1 Ratings (720 Votes)

1 Fixed Overhead Budget Variance Budgeted Fixed OH Actual Fixed OH 160000 160000 0 ie None Budgeted Fixed Overhead rate per unit Budgeted Fixed OHBudgeted Units 1600006500 units 2461538 per unit See Answer

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In: AccountingTaylor Inc. uses a standard cost system. The company has thefollowing results for the current...Taylor Inc. uses a standard cost system. The company has thefollowing results for the current period: BudgetActual Fixed overhead$160,000$160,000 Units6,500units6,000units Direct labour-hours (DLH)13,333hours12,500hoursStandard quantity of DLH per unit2.0152hours Variable overhead is applied at $27.50 per direct labour-hour.Actual variable overhead was $310,600. Required:1.Compute the fixed overhead budget variance and the volumevariance. (Indicate the effect of each variance byselecting "F" for favorable, "U" for unfavorable, and "None" for noeffect (i.e., zero variance).)2.“Because the actual overhead and the budgeted overhead are thesame the volume variance is 0.” True or false? Showcalculations.TrueFalse3.Compute the total variable overhead variance. (Indicatethe effect of each variance by selecting "F" for favorable, "U" forunfavorable, and "None" for no effect (i.e., zerovariance).)

	Budget			Actual
Fixed overhead	$	160,000		$	160,000
Units		6,500	units		6,000	units
Direct labour-hours (DLH)		13,333	hours		12,500	hours
Standard quantity of DLH per unit		2.0152	hours

1.	Compute the fixed overhead budget variance and the volumevariance. (Indicate the effect of each variance byselecting "F" for favorable, "U" for unfavorable, and "None" for noeffect (i.e., zero variance).)

3.	Compute the total variable overhead variance. (Indicatethe effect of each variance by selecting "F" for favorable, "U" forunfavorable, and "None" for no effect (i.e., zerovariance).)