CarParts Company is planning to produce 3,200,000 carburetors for the coming year.Each carburetor requires 0.375 standard hours of labour for completion.The company uses direct labour hours to assign overhead to products.The total fixed overhead budgeted for the coming year is $1,980,000.Total budgeted overhead is $4,050,000.Predetermined overhead rates are calculated using expected production,measured in direct labour hours.Actual results for the year follow: $$\begin{array} { l r }
\text { Actual production (units) } & 3,540,000 \
\text { Actual direct labour hours } & 1,190,000 \
\text { Actual fixed overhead } & \$ 1,920,000 \
\text { Actual variable overhead } & 2,150,000
\end{array}$$ Required: A. Compute the applied fixed overhead.
B. Compute the fixed overhead spending and volume vari ances.
C. Compute the applied variable overhead.
D. Compute the variable overhead spending and efficiency variances. Carry per hour
computations out to three decimal places.

Question

CarParts Company is planning to produce 3,200,000 carburetors for the coming year.Each carburetor requires 0.375 standard hours of labour for completion.The company uses direct labour hours to assign overhead to products.The total fixed overhead budgeted for the coming year is $1,980,000.Total budgeted overhead is $4,050,000.Predetermined overhead rates are calculated using expected production,measured in direct labour hours.Actual results for the year follow: $$\begin{array} { l r } 
\text { Actual production (units) } & 3,540,000 \
\text { Actual direct labour hours } & 1,190,000 \
\text { Actual fixed overhead } & \$ 1,920,000 \
\text { Actual variable overhead } & 2,150,000
\end{array}$$ Required: A. Compute the applied fixed overhead.
B. Compute the fixed overhead spending and volume vari ances.
C. Compute the applied variable overhead.
D. Compute the variable overhead spending and efficiency variances. Carry per hour 
computations out to three decimal places.

Quizplus · Accepted Answer

The Answer of CarParts Company is planning to produce 3,200,000 carburetors for the coming year.Each carburetor requires 0.375 standard hours of labour for completion.The company uses direct labour hours to assign overhead to products.The total fixed overhead budgeted for the coming year is $1,980,000.Total budgeted overhead is $4,050,000.Predetermined overhead rates are calculated using expected production,measured in direct labour hours.Actual results for the year follow: $$\begin{array} { l r } 
\text { Actual production (units) } & 3,540,000 \
\text { Actual direct labour hours } & 1,190,000 \
\text { Actual fixed overhead } & \$ 1,920,000 \
\text { Actual variable overhead } & 2,150,000
\end{array}$$ Required: A. Compute the applied fixed overhead.
B. Compute the fixed overhead spending and volume vari ances.
C. Compute the applied variable overhead.
D. Compute the variable overhead spending and efficiency variances. Carry per hour 
computations out to three decimal places.

CarParts Company Is Planning to Produce 3,200,000 Carburetors for the Coming