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The Following Information Relates to Manufacturing Overhead for the Chapman

question 144

Essay

The following information relates to manufacturing overhead for the Chapman Company:
Standards:
Total fixed factory overhead - $450,000
Estimated production - 25,000 units 100% of normal capacity
Overhead rates are based on machine hours
Standard hours allowed per unit produced - 2
Fixed overhead rate - $9.00 per machine hour
Variable overhead rate - $3.50 per hour
Actual:
Fixed factory overhead - $450,000
Production - 24,000 units
Variable overhead - $170,000
Compute a the fixed factory overhead volume variance, b the variable factory overhead controllable variance, and c the total factory overhead cost variance.


Definitions:

Annual Rate

The interest rate for a period of one year, often used for comparing the yields of investments or loans.

Borrowed

Describes money that has been taken from another party with the agreement that it will be repaid, typically with interest.

Daily Interest

Interest calculation method where the interest is accrued daily.

Savings Account

A bank account where money is kept so that it can earn interest over time, typically used for holding funds that are not needed for daily expenses.

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