(Appendix 11A)Faessler Corporation Applies Overhead to Products Based on Machine-Hours

question 57

Essay

(Appendix 11A)Faessler Corporation applies overhead to products based on machine-hours.The denominator level of activity is 6, 500 machine-hours.The budgeted fixed manufacturing overhead costs are $242, 450.In July, the actual fixed manufacturing overhead costs were $242, 490 and the standard machine-hours allowed for the actual output were 7, 000 machine-hours.
Required:
a.Compute the budget variance for July.Show your work!
b.Compute the volume variance for July.Show your work!

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Definitions:

Ledger

A book or other collection of financial accounts of a particular type or for a specific purpose in accounting.

Journal

A formal record where all financial transactions of a business are initially recorded, date-wise, before being posted to the general ledger.

Trial Balance

A statement that lists all the balances of the general ledger accounts of a business at a particular time to check the correctness of double-entry bookkeeping.

Ledger Balance

The total balance of all accounts in a ledger at a particular point in time, reflecting the current financial position.