Erie Co Uses Machine Hours to Apply Standard Overhead Cost to to Production

question 81

Essay

Erie Co. uses machine hours to apply standard overhead cost to production. The following data pertain to October: $\begin{array}{lr}\text { Master budget data: } & \\\text { Units } & 100,500 \\\text { Total machine hours (denominator volume) } & \$ 250,000 \\\text { Total variable overhead cost } & \$ 50,000\\\text { Actual operating results: }\\\text { Variable overhead cost incurred } & \$ 265,000 \\\text { Fixed overhead cost incurred } & \$ 54,000 \\\text { Units manufactured } & 2,250 \\\text { Total machine hours } & 96,000\end{array}$ Required:
Compute the following variances using machine hours as the activity variable used to assign standard overhead costs to production. Show calculations.
1. Variable overhead spending variance
2. Variable overhead efficiency variance
3. Fixed overhead spending variance
4. Fixed overhead production-volume variance

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Definitions:

Drug Dependency

A condition where an individual becomes physically or psychologically reliant on substances, often affecting personal and professional life.

Alcohol Dependency

A medical condition characterized by a strong, often uncontrollable desire to drink alcohol, leading to a physical and psychological dependence.

Discrimination

Unfair or prejudicial treatment of individuals based on characteristics such as race, gender, age, or sexual orientation, rather than their merits or abilities.

Inclusion Initiatives

Are strategies or programs implemented by organizations to create an environment that welcomes, values, and supports diversity among its members.