Pickell Incorporated Makes a Single Product--A Cooling Coil Used in Commercial

question 138

Essay

Pickell Incorporated makes a single product--a cooling coil used in commercial refrigerators.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:
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.
e.Determine whether overhead was underapplied or overapplied for the year and by how much.

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Definitions:

Liable

Subject to legal obligation, where an individual or entity is responsible for fulfilling certain duties or compensating for harm caused to others.

Conditions Precedent

Specific conditions that must be fulfilled before a contract or agreement becomes legally binding.

Negotiable Instrument

An official written promise to pay a specified amount of money, which can be demanded at any time or payable at an agreed upon time, identifying the payer on the document.

Secondary Liability

A legal responsibility whereby one party is held liable for the actions of a third party, typically in copyright or partnership cases.