Held Incorporated Makes a Single Product--An Electrical Motor Used in Many

question 16

Essay

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: Required:
a.Compute the variable component of the company's predetermined overhead rate.
b.Compute the fixed component of the company's predetermined overhead rate.
c.Compute the company's predetermined overhead rate.
d.Determine the variable overhead rate variance for the year.
e.Determine the variable overhead efficiency variance for the year.
f.Determine the fixed overhead budget variance for the year.
g.Determine the fixed overhead volume variance for the year.
h.Determine whether overhead was underapplied or overapplied for the year and by how much.

---

Definitions:

Discount Rate

The interest rate charged by central banks for loans to their member banks, influencing monetary policy and economic conditions.

Open Market

An open market refers to an unrestricted market with a wide array of economic participants and transactions where goods, services, and financial assets can be traded freely.

Money Supply

This is the total amount of monetary assets available in an economy at a specific time, including cash, coins, and balances held in checking and savings accounts.

Discount Rate

The interest rate charged by central banks on loans offered to commercial banks or other financial institutions.