Dull Corporation Applies Overhead to Products Based on Machine-Hours

question 75

Essay

Dull Corporation applies overhead to products based on machine-hours.The denominator level of activity is 8,600 machine-hours.The budgeted fixed manufacturing overhead costs are $286,380.In October,the actual fixed manufacturing overhead costs were $274,330 and the standard machine-hours allowed for the actual output were 8,400 machine-hours.
Required:
a.Compute the budget variance for October.Show your work!
b.Compute the volume variance for October.Show your work!

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Definitions:

Transaction

The act of conducting business or completing an exchange of goods, services, or funds between two or more parties.

Express Condition

An express condition is a specific, clearly stated requirement within a contract that must be fulfilled for the obligations of the contract to be performed.

Implied Covenant

An unspoken legal promise or guarantee, assumed to be included in a contract or transaction.

Good Faith

Acting with honesty and without intent to defraud or seek an unfair advantage, particularly in contractual or negotiation settings.