Standard Cost System Overhead Variances

question 87

Essay

Standard cost system overhead variances
Rogers Manufacturing produces a component part used throughout the computer industry.Variable overhead is allocated to production at a rate of $5 per unit.The company's monthly fixed overhead costs average $30,000.Normal output levels average 40,000 units per month.During April,Rogers produced 50,000 units and incurred actual overhead costs of $280,000.
(a)Total overhead applied to production in April amounted to $________.
(b)Total overhead budgeted in April for the level of output achieved amounted to $________.
(c)April's overhead spending variance was $________ (favorable/unfavorable).
(d)April's overhead volume variance was $________ (favorable/unfavorable).
(e)For which of Rogers' two overhead variances is the production manager held responsible?

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Definitions:

Carryback

Carryback involves applying tax deductions or credits to a prior tax year, resulting in a tax refund or reduced tax liability.

Carry Forward

A provision that allows individuals or businesses to apply current year losses, credits, or deductions to future tax years, to reduce taxable income.

Corporation

A legal entity that is separate and distinct from its owners, capable of owning property, entering contracts, and being sued.

Income Tax Payable

The amount of income tax a company owes to the government but has not paid by the end of the period.