Sucher Company Uses a Standard Cost System in Which Manufacturing

question 30

Essay

Sucher Company uses a standard cost system in which manufacturing overhead costs are applied to units of product on the basis of standard machine-hours.The company's standards are based on variable manufacturing overhead of $3 per machine-hour and fixed manufacturing overhead of $300,000 per year.The denominator level of activity is 30,000 machine-hours.Standards call for 2.5 machine-hours per unit of output.Actual activity and manufacturing overhead costs for the year are given below: $\begin{array}{lcl} \text { Units produced.................... } &12,800& \text {units}\\ \text { Machine-hours used............. } &31,600& \text {machine-hours}\\ \text { Overhead costs incurred: } &\\ \text { Variable costs...................... } &\$96,000\\ \text { Fixed costs..........................} &\$297,000\\\end{array}$
Required:
a.What are the standard hours allowed for the output?
b.What was the variable overhead rate variance?
c.What was the variable overhead efficiency variance?
d.What was the fixed manufacturing overhead budget variance?
e.What was the fixed manufacturing overhead volume variance?

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