The Violet Company Established a Master Budget Volume of 30,000

question 204

Essay

The Violet Company established a master budget volume of 30,000 units for September. Actual overhead costs incurred amounted to $84,500 and included variable overhead of $56,000 and fixed overhead of $28,500. Actual production for the month was 32,000 units. The standard variable overhead rate was $2 per direct labour hour. The standard fixed overhead rate was $1 per direct labour hour. One direct labour hour is the standard quantity per finished unit. Assume the allocation base for fixed overhead costs is the number of direct labour hours.
Required:
1. Compute the total manufacturing overhead cost variance.
2. Compute the variable overhead flexible budget variance.
3. Compute the fixed overhead budget variance.
4. Compute the production volume variance.

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Definitions:

Palpation

The method of feeling with the hands or fingers during a physical examination to detect characteristics or conditions of the body.

Percussion

A diagnostic technique in medicine involving the tapping on a surface to determine the underlying structure’s condition based on the sound produced.

Inspection

The visual examination of the body in a medical context to identify any abnormal signs or conditions.

Problem Solving

The process of identifying a problem, developing possible solutions, and taking the necessary steps to reach a desired outcome.